Sobier T.C.J.:
1 The Appellant appeals from the assessment by the Minister of National Revenue (the “Minister”) for his 1994 taxation year, whereby the Minister disallowed an equivalent to married deduction claimed by the Appellant pursuant to paragraph 118(1)(b)[FN1: <ul>118(1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount determined by the formula (and a formula follows)<li><ul>(b) in the case of an individual not entitled to a deduction by reason of paragraph (a) who, at any time in the year,<li><p>(i) is an unmarried person or a married person who neither supported nor lived with his spouse and is not supported by his spouse, and</p></li><li><ul>(ii) whether by himself or jointly with one or more other persons, maintains a self-contained domestic establishment (in which the individual lives) and actually supports in that establishment a person who, at that time, is<li><p>(A) except in the case of a child of the individual, resident in Canada,</p></li><li><p>(B) wholly dependent for support on the individual, or the individual and the other person or persons, as the case may be, ...</p></li></ul></li></ul></li></ul>] of the Income Tax Act (the “Act”). The disallowance was made pursuant to subsection 118(5)[FN2: <p>118(5) Where an individual in computing this individual's income for a taxation year is entitled to a deduction under paragraph 60(<em>b</em>), (<em>c</em>) or (<em>c</em>.1) in respect of a payment for the maintenance of a spouse or child, the spouse or child shall, for the purposes of this section (other than the definition “qualified pension income” in subsection (7)) be deemed not to be the spouse or child of the individual.</p>] of the Act, since being entitled to deduct child support paid to his wife in respect of the child Jonathan, under paragraph 60(c)[FN3: <ul>60. There may be deducted in computing a taxpayer's income for a taxation year such of the following amounts as are applicable:<li><ul>(<em>c</em>) an amount paid by the taxpayer in the year as an allowance payable on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and the children, if<li><p>(i) at the time the amount was paid and throughout the remainder of the year the taxpayer was living separate and apart from the recipient,</p></li><li><p>(ii) the taxpayer is the natural parent of a child of the recipient, and</p></li><li><p>(iii) the amount was received under an order made by a competent tribunal in accordance with the laws of a province;</p></li></ul></li></ul>] of the Act, the Minister asserts that he is disentitled to claim the equivalent to married amount.
2 The Appellant and his spouse were divorced on February 15, 1994, pursuant to an Order of the Supreme Court of British Columbia. In accordance with that Order, the Appellant and his former spouse were granted joint custody of their children. A consent order was issued whereby the Court went into great detail as to access to the children by their parents. In addition, the Appellant was ordered to pay his former spouse $200 per month for each of his two children. In his 1994 return, he claimed and received a deduction of $4,000 under paragraph 60(c) of the Act for the child support payments. In addition, he claimed the equivalent to married credit was in respect of his son Jonathan, which the Minister disallowed.
3 The Appellant claims that this disallowance is discriminatory and violates his rights under subsection 15(1) of the Charter of Rights and Freedoms (the “Charter”). The claim of discrimination is not based on marital status, but on the basis that he is a joint custodian of his son who pays child support to his former spouse and who is also required to pay for his son's food, clothing and other expenses, while the son is in his custody, but yet, he is not able to take advantage of the provisions of paragraph 118(1)(b) of the Act. The distinct group of which he claims to be a member, which has been discriminated against, is said to be joint custodial parents paying child support.
4 From its plain reading, subsection 118(5) would deny the Appellant the right to lay claim to the deduction under subsection 118(1)(b). Therefore, we must examine the Appellant's claim that subsection 118(5) violates his rights under section 15 of the Charter.
5 Subsection 15(1) of the Charter reads as follows:
Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
6 In analyzing the provisions of subsection 15(1), we are directed by Chief Justice Lamer in R. v. Swain, [1991] 1 S.C.R. 933 (S.C.C.), who said at page 992:
The court must first determine whether the claimant has shown that one of the four basic equality rights has been denied (i.e., equality under the law, equal protection of the law and equal benefit of the law). This inquiry will focus largely on whether the law has drawn a distinction (intentionally or otherwise) between the claimant and others, based on personal characteristics. Next, the court must determine whether the denial can be said to result in“ discrimination”. This second inquiry will focus largely on whether the differential treatment has the effect of imposing a burden, obligation or disadvantage not imposed upon others or of withholding or limiting access to opportunities, benefits and advantages to others. Furthermore, in determining whether the claimant's s. 15(1) rights have been infringed, the court must consider whether the personal characteristic in question falls within the grounds enumerated in the section or within an analogous ground, so as to ensure that the claim fits within the overall purpose of s. 15 - namely, to remedy or prevent discrimination against groups subject to stereotyping, historical disadvantage and political and social prejudice in Canadian society.
7 In Schachtschneider v. R. (1993), 93 D.T.C. 5298 (Fed. C.A.), the Federal Court of Appeal considered the application of section 15 of the Charter to section 118 of the Act. In doing so, the Court considered the groups distinguished by this section. Mahoney, J.A., held that the section created a distinction between the group to which the taxpayer belonged, that is married persons with a child of the marriage living together and not supporting each other. However, he held that the section was not discriminatory because the group was not one that can be described as being disadvantaged in the context of its place in the entire social, political and legal fabric of our society. It followed that it was not a distinctive minority within the contemplation of subsection 15(1).[FN4: <p>At page 5303.</p>]
8 Linden, J.A. also concluded that a distinction had been created, but he considered the effect of section 118 upon the group which the applicant had pleaded, namely married persons. At page 5308, he stated:
The first stage of the test is not difficult to satisfy and is met on the facts of this case. Paragraph 118(1)(b) of the Income Tax Act draws a distinction between married and unmarried individuals, and its operation provides a greater benefit to the latter group. While the Income Tax Act is not normally perceived as a benefit conferring statute, it is altogether appropriate to consider a tax credit as a benefit within the context of that Act. In any event, for the purposes of the four equalities set out in subsection 15(1), differential treatment regarding the application of the Income Tax Act, and the scheme of tax credits in paragraph 118(1)(b) in particular, constitutes a denial of equal benefit of the law. The first hurdle of the subsection 15(1) test is, therefore, overcome.
9 And further on, he stated that a violation of subsection 15(1) will not be found, however, unless the denial of equality is determined to be discriminatory:
Both the ground of discrimination and the group discriminated against are important under subsection 15(1). It is necessary to identify the group of discrimination in order to determine whether the claim fits within the ambit of subsection 15(1). It is also necessary to consider the group claiming discrimination since the historical, social and political circumstances of that group influences the determination about whether an adverse distinction is discriminatory.
10 A further insight into discrimination may be found in Andrews v. Law Society (British Columbia), [1989] 1 S.C.R. 143 (S.C.C.), at page 180, where Mr. Justice McIntyre said in that regard:
The analysis of discrimination in this approach must take place within the context of the enumerated grounds and those analogous to them. The words “without discrimination” require more than a mere finding of distinction between the treatment of groups or individuals. Those words are a form of qualifier built into s. 15 itself and limit those distinctions which are forbidden by the section to those which involve prejudice or disadvantage.
I would accept the criticisms of the first approach made by McLachlin J.A. in the Court of Appeal. She noted that the labelling of every legislative distinction as an infringement of s. 15(1) trivializes the fundamental rights guaranteed by the Charter and secondly, that to interpret “without discrimination” as“ without distinction” deprives the notion of discrimination of content, she continued, at p. 607:
Third, it cannot have been the intention of Parliament that the government be put to the requirement of establishing under s. 1 that all laws which draw distinction between people are “demonstrably justified in a free and democratic society”. If weighing of the justifiability of unequal treatment is neither required or permitted under s. 15, the result will be that such universally accepted and manifestly desirable legal distinctions as those prohibiting children or drunk persons from driving motor vehicles will be viewed as violations of fundamental rights and be required to run the gauntlet of s. 1.
Finally, it may further be contended that to define discrimination under s. 15 as synonymous with unequal treatment on the basis of personal classification will be to elevate s. 15 to the position of subsuming the other rights and freedoms defined by the Charter.
11 The Act is filled with distinctions which do not give way to discrimination.
12 Recently, in the case of Mercier c. Ministre du Revenu national)(1996), 143 D.L.R. (4th) 146 (Fed. T.D.), Madam Justice Tremblay-Lamer of the Federal Court - Trial Division said at [para28-29]:
[para28] At this point, the specific characteristics of the Income Tax Act should be considered. In determining whether the provision in question draws a distinction, I must bear in mind the specific nature of the Act and the personal credit schemes it establishes. In Thibaudeau,[FN5: <p><em>Thibaudeau v. R.</em>(1995), 95 D.T.C. 5273 (S.C.C.).</p>] the Supreme Court of Canada held that it is intrinsic to the Income Tax Act to create distinctions so as to generate revenue for the state while equitably reconciling a set of interests that are necessarily divergent.
[para29] As far as personal credits are concerned, the courts have found that their purpose is to make the tax fairer by recognizing the different circumstances of taxpayers and taking account of their differing ability to pay taxes as a result of those circumstances.
13 In my opinion, this sums up the matter quite succinctly.
14 The purposes and objectives of section 118 have been commented upon in Thibaudeau and Schachtschneider.
15 In Thibaudeau, Gonthier, J. made the following comments regarding the role of personal credits in the taxation system at page 5289:
In their very wording the three main credits which the respondent may claim (I refer to the equivalent to married credit provided for in s. 118(1)(b) ITA, the tax credit for dependents in s. 118(1)(d) and the child tax credit provided by s. 122.2) are not in fact in any way exclusively associated with custody of a child pursuant to an order, judgment or written agreement. In fact, in enacting these provisions it would appear that the legislature instead intended to alleviate the tax burden of a wide range of persons whose only common denominator is having dependents. This arrangement is not de facto contrary to the custodial parent in a separation situation generally being the one able to claim such credits. The respondent's particular case is an example of this. Nevertheless, I repeat that for purposes of determining prejudice the only comparison which is valid in this case is that between the system applicable to separated or divorced parents and the situation they would be in without such special provisions, namely the general taxation system. It is not relevant to try to assess the extent of the prejudice alleged by the respondent by seeing whether within the ITA the result of other legislative provisions is to minimize the effects of the provision in question, when they are not related to it.
16 In Schachtschneider, Linden, J.A. considered the function of section 118 at page 5312:
...Section 118 tries to assist taxpayers who have dependents, granting them a significant additional credit, not given to single taxpayers. A married person supporting a spouse may receive nearly double the single status deduction (see paragraph 118(1)(a)). A taxpayer who does not support a spouse, but has a dependent other than a spouse, is also allowed nearly double the amount of the single status deduction (paragraph 118(1)(b)). In fact, this helps mainly unmarried persons and separated individuals who bear the additional financial burden of supporting a child or other relative on one salary. Parliament did not intend any family to receive more than double the single status exemption, (aside from the smaller dependent deductions) but because of the outdated definition of spouse in the Act, unmarried people were not considered to be a “family”. Thus, unmarried couples, who both work and support a child, may deduct nearly triple the single status exemption, if one of them claims the equivalent to married status and the other claims the single status exemption. If they have two children, each may claim the equivalent to married deduction, giving them a combined deduction of nearly quadruple the single status exemption. This is an unexpected result, an anomaly, which leaves unmarried persons better off than married persons in this narrow situation.
On balance, therefore, viewing the section in its entirety, I cannot say that its effects are discriminatory against married people. These distinctions are merely distinctions that Parliament is allowed to draw in order to operate an efficient, self-reporting tax system, not requiring undue intrusion on people's private lives. Sometimes a particular group may get a small advantage; at other times, it may suffer a minor disadvantage. That is the way the tax system works. It cannot be expected to be perfect. Unless there is clear evidence that a provision discriminates against an advantaged group on section 15 grounds, it is something that negatively affected Canadians must tolerate until Parliament sees fit to remedy it.
17 I believe the above passages apply to the appeal at bar. The Appellant and his former spouse receive greater benefits than other couples under section 118, therefore subsection 118(5) is designed to prevent them from receiving even greater benefits than they already receive. Perhaps, put another way, the Appellant and his former spouse receive benefits which are equal to those received by other couples under section 118, and subsection 118(5) merely prevents them from receiving greater benefits than those other couples.
18 Although the group to which the Appellant claims membership may be distinct, they are not being discriminated against. Custodial parents paying maintenance with respect to their children are not a distinct or insular minority which have traditionally suffered prejudice in Canadian society. Nor can they claim discrimination, since they cannot be described as being disadvantaged in the context of their place in the entire social legal fabric of our society. I find therefore that subsection 118(5) of the Act does not violate the Appellant's equality rights under subsection 15(1) of the Charter.
19 For these reasons, the appeal is dismissed.
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