Federal Court of Appeal Decisions

Date: 20051209

Docket: A-590-04

Citation: 2005 FCA 420

CORAM:        SEXTON J.A.

                        EVANS J.A.

                        SHARLOW J.A.

BETWEEN:

ATTORNEY GENERAL OF CANADA

Appellant

and

WILLIAM S. CAMPBELL

Respondent

Heard at Toronto, Ontario, on October 12, 2005.

Judgment delivered at Ottawa, Ontario, on December 9, 2005.

REASONS FOR JUDGMENT BY:                                                                                 EVANS J.A.

CONCURRED IN BY:                                                                                                 SEXTON J.A.

SHARLOW J.A.

Date: 20051209

Docket: A-590-04

Citation: 2005 FCA 420

CORAM:        SEXTON J.A.

                        EVANS J.A.               

                        SHARLOW J.A.

BETWEEN:

ATTORNEY GENERAL OF CANADA

Appellant

and

WILLIAM S. CAMPBELL

Respondent

REASONS FOR JUDGMENT

EVANS J.A.

A         INTRODUCTION

[1]                This is an appeal by the Minister of National Revenue from a decision by a Judge of the Tax Court of Canada. The Judge allowed an appeal by William Campbell from a determination by the Minister that Mr Campbell was not entitled to the Canada Child Tax Benefit ("CCTB") which he had been paid for the 1995, 1996, and 1997 taxation years.

[2]                Although the Judge found that Mr Campbell was not eligible for the CCTB with respect to his son, Trystan, he also held that the Minister had violated Mr Campbell's equality rights under section 15 of the Canadian Charter of Rights and Freedoms by determining that the CCTB was payable to Trystan's mother, on the basis of the presumption in paragraph 122.6(f) of the Income Tax Act ("ITA"). This provides that the female parent is presumed to be the primary caregiver of her children when she is living with them. The Judge's decision is reported as Campbellv. Canada, 2004 TCC 460.

[3]                The issue to be decided in this appeal is whether the statutory presumption violates section 15 by discriminating, in the constitutional sense, against fathers. This is to be determined by applying the analytical framework established in Law v. Canada(Minister of Employment and Immigration), [1999] 1 S.C.R. 497.

[4]                Counsel for the Minister says that the presumption does not infringe section 15. She argues that it merely reflects the social reality that many more mothers than fathers are the primary caregivers of their children. By presumptively directing payment to mothers, paragraph 122.6(f) enables the CCTB to reach children, the ultimate beneficiaries of the program, with minimum administrative delay and expense. Since the presumption can be rebutted, fathers are entitled to the CCTB if they establish that they are the primary caregivers of their children.

[5]                Counsel for Mr Campbell supports the Judge's award of relief, but says that he should have found that the statutory presumption was invalid. She submits that it demeans Mr Campbell's human dignity and, hence, violates section 15, on the ground that it reflects and reinforces the anachronistic gender stereotypes that fathers are less worthy and capable than mothers as parents, and that mothers should stay at home to look after children. The statutory presumption fails to take account of Mr Campbell's individual needs, capacities or merits, and his role as caregiver.

B.        FACTUAL BACKGROUND

[6]                Trystan was born in March 1997 to William and Laurie Campbell, and lived with his parents until they separated in March 1999. A year after the separation, Mr Campbell applied for the CCTB for the period March 1997 to April, 1999 ("the disputed period"). In view of the information that Mr Campbell had supplied, the Minister found him eligible for the CCTB, on the basis that he was not living with his child's mother during the disputed period.

[7]                On the application form Mr Campbell stated, wrongly, that he was single, and failed to explain that he was married and living with Trystan's mother during the disputed period. He received the CCTB payments as the primary caregiver during the disputed period in respect of each of 1995, 1996, and 1997, his "base taxation years" as defined by the ITA.

[8]                In January 2001, the Canada Customs and Revenue Agency ("CCRA") sent Mr Campbell a questionnaire asking for information about his role in Trystan's care during the disputed period. Presumably, this was triggered by the CCRA's receipt of a claim by Ms Campbell for the CCTB for the same period. Mr Campbell responded to the questionnaire, but he was found on a re-determination not to be the primary caregiver and his entitlement to CCTB was zero.

[9]                Mr Campbell filed a Notice of Objection. The Minister confirmed the re-determination in a notice of confirmation, dated February 22, 2002:

The Minister of National Revenue has considered the reasons set out in your objection and all relevant facts. It is hereby confirmed that the assessments have been made in accordance with the provisions of section 122.6 of the Income Tax Act on the basis that: you are not the eligible individual to receive the Canada Child Tax Benefit for the period April 1997 to April 1999.

C.        THE STATUTORY SCHEME

[10]            The CCTB is an income-related benefit which provides financial assistance to families with children. It is paid to the "eligible individual", that is, the parent who is the primary caregiver of the "qualified dependant". Section 122.6 of theITA defines "eligible individual" as the parent who "primarily fulfils the responsibility for the care and upbringing of the qualified dependant".

[11]            Section 6302 of the Income Tax Regulations sets out the factors to be considered in determining which parent is the primary caregiver. However, as already noted, paragraph 122.6(f) provides that the female parent is presumed to be the primary caregiver when she is living with the child. The presumption is rebuttable (Cabot v. Canada, [1998] 4 C.T.C. 2893 at para. 24 (T.C.C.)). In addition, the application of the statutory presumption may be excluded by regulations made under paragraph 122.6(g). For example, it does not apply when the female parent advises the Minister in writing that the male parent is the primary caregiver nor, when competing claims are made, the parents do not reside at the same location, or there are two female parents: Regulations, paragraphs 6301(1)(a), (c) and (d).

[12]            If a father claims the CCTB in circumstances when the presumption does not apply, his claim may be accepted without documentation. Thus, Mr Campbell's initial claim for the CCTB was accepted on the basis of the application form. This was because Mr Campbell failed to disclose that he was not married to and living with Trystan's mother during the disputed period. Accordingly, the Minister thought that the presumption did not apply.

[13]            When the presumption applies, the female parent simply applies for the CCTB. The male parent, on the other hand, must also provide either a written declaration from the female parent acknowledging that the male parent is the primary caregiver, or information detailing the male parent's care-giving role.

[14]            The legislation does not describe the decision-making process when the presumption applies and there are competing claims. However, fairness would seem to require that, if the mother claims the CCTB and the father makes submissions in an attempt to establish that he is the primary caregiver, the Minister should not find in favour of the father without giving her an opportunity to respond. The Minister must then decide which parent is the primary caregiver, on the basis of the totality of the information received and the factors set out in paragraph 6302 of the Regulations. If the evidence is inconclusive, the presumption may come into play again as a tie-breaker.

[15]            The Judge found that this was not the decision-making process followed in the present case, and that the Minister re-determined his entitlement to the CCTB solely on the basis of the statutory presumption in paragraph 122.6(f), without referring to Mr Campbell's responses to the questionnaire or considering the best interests of Trystan. Nonetheless, having made a de novo finding of eligibility, the Judge found that Mr Campbell's testimony was not credible. On the basis of the evidence of Ms Campbell and her sister, the Judge concluded that Ms Campbell was the primary caregiver during the disputed period.

[16]            The CCTB is administered through claimants' income tax returns. When payable, the CCTB is treated as overpaid income tax. Entitlement to, and the amount of, the CCTB is determined by reference to the eligible individual's "base taxation years", which in Mr Campbell's case, were the 1995, 1996, and 1997 taxation years. As a result of the Minister's re-determination, Mr Campbell became liable to repay the amounts overpaid under the original assessments for his base taxation years.

D.        DECISION OF THE TAX COURT

[17]            The Judge held that he would have found that paragraph 122.6(f) was in breach of section 15, except for the fact that there may be circumstances when the best interests of the child require prompt payment of the CCTB. However, he concluded, this consideration was not relevant on the facts of the present case because the Minister had based the re-determination exclusively on the statutory presumption without inquiring whether Trystan's best interests required the prompt payment of the CCTB. The re-determination thus violated section 15, and forced Mr Campbell to file a notice of objection and an appeal, a process which cost him money, time and energy.

[18]            The Judge then considered what remedy to award under section 24 of the Charter. Having found on the evidence that Mr Campbell was not entitled to the CCTB, the Judge could hardly set aside the Minister's re-determination in order to remedy the Charter breach. Indeed, he dismissed Mr Campbell's appeals from the assessments of the 1995, 1996, and 1996 taxation years. Nonetheless, the Judge awarded Mr Campbell damages of $1,000, including costs, under section 24 of the Charter to compensate him for the time, expense, and energy that he had expended as a result of being forced into the position of appellant on the ground of his gender. In addition, the Judge issued a "mandatory direction" that, in future, the Tax Court should determine which parent was the primary caregiver, without either employing a presumption, or assigning a burden of proof.

[19]            Counsel for the Minister says that the Judge erred in finding that Mr Campbell's section 15 rights had been breached. However, if, contrary to her contention, there had been a Charter breach, the Tax Court had no jurisdiction to remedy it with an award of damages or "mandatory directions".

[20]            In addition to defending the jurisdiction of the Tax Court to award these remedies under section 24, counsel for Mr Campbell argues that the Judge should have concluded that paragraph 122.6(f) itself is invalid under section 15. However, she does not challenge the Judge's conclusion that, on the basis of the evidence before him, Ms Campbell was Trystan's primary caregiver during the disputed period and was therefore eligible to receive the CCTB.

[21]            For the reasons which follow, I am of the opinion that paragraph 122.6(f) does not breach section 15. The validity of the statutory presumption in favour of the female parent is not limited to situations where it is reasonable to conclude that the best interests of the child so require prompt payment of the CCTB. The reply of the Deputy Attorney General to Mr Campbell's notice of appeal seems to have been the only basis of the Judge's finding that the Minister re-determined that Mr Campbell was not entitled to the CCTB because of the statutory presumption, and had no regard to Mr Campbell's responses to the questionnaire. However, it is not at all clear to me that the reply can support such an inference. In any event, in the notice of confirmation of the re-determination, Mr Campbell was advised that the Minister "has considered the reasons set out in your objection and all the relevant facts." Since there is no basis in the evidence for finding that the Minister's re-determination violated Mr Campbell's section 15 rights, the Judge's award of damages cannot stand.

[22]            Consequently, I need not decide whether the Tax Court has jurisdiction to award damages or issue "mandatory directions" under section 24 of the Charter. These are questions for another day.

[23]            On the other hand, it is clear in light of Nova Scotia (Workers' Compensation Board) v. Martin, [2003] 2 S.C.R. 504, that, pursuant to subsection 52(1) of the Charter, the Tax Court has jurisdiction to decide Charter challenges to the validity of a provision in the ITA or its application to particular facts, or of administrative action purportedly taken pursuant to it, when necessary to dispose of an appeal otherwise within its jurisdiction,

E.         THE LEGISLATIVE FRAMEWORK

[24]            I set out below the statutory and constitutional provisions relevant to this appeal.

Income Tax Act, R.S.C. 1985 (5^th Supp.), c. 1

Income Tax Regulations, C.R.C. c. 945

Canadian Charter of Rights and Freedoms

F.        ANALYSIS

[25]            It is common ground that Mr Campbell satisfies the first two elements of the analytical framework established by the Supreme Court of Canada in Law for determining whether section 15 has been breached.

[26]            First, paragraph 122.6(f) draws a formal distinction between Mr Campbell, as a male parent, and female parents, on the basis of a personal characteristic by presuming, in the absence of evidence to the contrary, that mothers are the primary caregivers of their children. In contrast, a father who claims the CCTB must provide information in support of his claim, or provide a written consent from the female parent with whom he and the child are residing, stating that he is the primary caregiver.

[27]            Second, this differential treatment is based on sex, a prohibited ground of discrimination under section 15. That not all men are fathers is, of course, beside the point, since fathers are a subset of men: Trociuk v. British Columbia(Attorney General), [2003] 1 S. C.R. 835 at para. 10.

[28]            The dispute thus turns on the third, and most difficult, element in Law, namely, whether the sex-based differential treatment of fathers in paragraph 122.6(f) impairs the essential human dignity of Mr Campbell as a member of this group. Whether a person's human dignity is impaired in the constitutional sense calls for both a subjective and an objective determination. The question is whether "from the perspective of a reasonable person in the place of the claimant, an infringement of her or his human dignity can be found": Canadian Foundation for Children, Youth and the Law v. Canada(Attorney General), [2004] 1 S.C.R. 76 at para. 223 (per Deschamps J. dissenting). Whether this hypothetical person, having also taken into account the contextual factors, would so conclude is determined on the basis of an analysis that includes the following four areas of inquiry.

(i) Nature of the interest affected

[29]            Mr Campbell says that paragraph 122.6(f) adversely affects the public recognition of his role as a parent, a role which is central to his identity as a person. I do not agree. Paragraph 122.6(f) does not deny the CCTB to fathers who are the primary caregivers of their children. The Regulations make a number of exceptions to the application of paragraph 122.6(f) and, when the presumption in favour of the mother applies (as it does in this case), the father may rebut it.

[30]            Thus, the presumption does not exclude fathers from receiving the CCTB to assist them to provide for the needs of children for whose care they have primary responsibility, except, perhaps, in the unusual case where the evidence submitted by competing parents is evenly balanced. I would only note that Mr Campbell does not challenge the Judge's finding of fact, made without the presumption, that he was not Trystan's primary caregiver in the disputed period.

[31]            Unlike the legislation considered in Trociuk, paragraph 122.6(f) does not purport to exclude fathers from participating equally with mothers in any aspect of their child's life, nor to deny public recognition of their parental role when they are the primary caregivers. In sum, the following factors suggest that paragraph 122.6(f) cannot reasonably be regarded as giving the message that men are inadequate parents: the procedural nature of the statutory presumption; the exceptions to its application; and, when the statutory presumption applies and there are competing claims for the CCTB, its limited effect on the resolution of the dispute.

(ii) Pre-existing disadvantage, vulnerability, stereotyping or prejudice experienced by the individual or group

[32]            Counsel led no evidence to show that, as a group, fathers are disadvantaged, vulnerable or prone to stereotyping, particularly with respect to the economic aspects of family life. The relatively disadvantaged position of mothers and children is considered below.

(iii) Proposed ameliorative purpose or effects

[33]            Legislation designed to ameliorate the position of the historically disadvantaged or vulnerable is less likely to be regarded as impairing the human dignity of the more advantaged. In this case, women have been historically disadvantaged relative to men. For example, on average women earn less than men and, when a spousal relationship ends, women with children are typically at a financial disadvantage, especially if they have been out of the work force, or have curtailed their education and training in order to care for children at home. See Miglin v. Miglin, [2003] 1 S.C.R. 303, 2003 SCC 24 at para. 198, (per LeBel J. dissenting).

[34]            Children are dependent on adults, generally their parents, for their material and developmental needs. They have been recognized as a historically disadvantaged group: Canadian Foundation for Children, Youth and the Law v. Canada(Attorney General), [2004] 1 S.C.R. 76 at para. 225.

[35]            In my view, the CCTB scheme as a whole is designed to benefit children, especially those in low-income families, by providing payments to their primary caregiver, who is usually their mother. The purpose of the CCTB was described in Cabot v. Canada, [1998] 4 C.T.C. 2893 at para. 20 as follows:

The child tax benefit is to benefit the child. The child tax benefit provides the parent who primarily fulfils the responsibility for the care and upbringing of the child with funds to bring up the children.

[36]            Within the statutory scheme, paragraph 122.6(f) enables the CCTB to be paid to the primary caregiver without the delay which would likely be caused by the resolution of competing claims if the presumption were abolished. The effect of the presumption thus benefits children, especially in low-income families.

[37]            Counsel for Mr Campbell conceded that, even though the number of fathers who stay at home to care for children has increased (from 1% in 1976 to 6% in 1997), mothers are statistically still more likely than fathers to be the primary caregivers in two-parent families. Hence, the presumption also assists women by relieving them of the burden of providing supporting evidence that they are the primary caregiver, and giving them the benefit of the doubt in close cases.

[38]            In brief, the ameliorative purposes and effects of the CCTB in general, and of paragraph 122.6(f) in particular, weaken the claim of Mr Campbell, a member of a non-disadvantaged group, that the statutory presumption would be regarded by a reasonable person in his situation as impairing the human dignity of male parents.

(iv) Correspondence between grounds of claim and situation of claimant

[39]            Here, the Court must consider to what extent the impugned legislation takes into account Mr Campbell'sindividual needs, merits, and capabilities in a manner that is respectful of his value as a human being and, in particular, as a father.

[40]            Paragraph 122.6(f) does not preclude consideration of a father's role as caregiver when supporting submissions are made. Indeed, paragraph 122.6(f) does not authorize the rejection of a claim by a father for the CCTB solely on the basis of the presumption in favour of the mother. Submissions and evidence from the father which indicate that he is the primary caregiver, and are sufficient to rebut the presumption, must be carefully considered and weighed, together with other information available to the decision-maker.

[41]            To the extent that paragraph 122.6(f) advantages mothers, it is because, in two-parent families, far more mothers than fathers are primary caregivers of their children. Admittedly, there may be rare cases when the evidence respecting competing claims is so evenly balanced that the presumption results in a decision in favour of the mother, although the father is in fact the primary caregiver. However, no decision-making process is infallible.

[42]            In my view, there is a reasonably close correspondence between paragraph 122.6(f) and the individual consideration of the role actually played by a father in the care of his child.

G.        CONCLUSIONS

[43]            For the above reasons, I am not persuaded that, when considered contextually, paragraph 122.6(f) is discriminatory in the constitutional sense: a person in Mr Campbell's position would not reasonably conclude, having considered the contextual factors that the statutory presumption impairs his human dignity.

[44]            Consequently, I need not deal separately with the argument that paragraph 122.6(f) is invalid because it also denies women the right to equality under the law. I did not understand counsel to argue that the paragraph's alleged impairment of the dignity of women provided an independent basis for striking down paragraph 122.6(f). Rather, she used it to support her principal contention that it discriminates against men.

[45]            In any event, my reasons for concluding that paragraph 122.6(f) cannot reasonably be regarded as denying the worth of fathers as parents are, in the main, also applicable to the contention that it tells women that their proper place is in the nursery. The presumption does not restrict or discourage mothers from pursuing careers outside the home.

[46]            By presumptively directing the payment of the CCTB to mothers, in order to ensure that the money is paid promptly and efficiently to the parent who normally has primary responsibility for supplying the child's needs, paragraph 122.6(f) merely reflects the social realities of parenting. I am not persuaded that a reasonable woman who has taken the contextual factors into account would conclude that the presumption impairs her human dignity.

[47]            For these reasons, I would allow the appeal and set aside the judgment of the Tax Court of Canada. Since this is an appeal by the Minister from a judgment in an informal proceeding to which section 18 of the Tax Court of Canada Act, R.S.C. 1985, c. T-2, applies, Mr Campbell is entitled to his "reasonable and proper costs ... in respect of the appeal" pursuant to section 18.25.

"John M. Evans"

"I agree.

     J. Edgar Sexton J.A."

"I agree.

     K. Sharlow J.A."

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                                                   A-590-04

                                                                                   

STYLE OF CAUSE:                                                   ATTORNEY GENERAL OF CANADA v.WILLIAM S. CAMPBELL

PLACE OF HEARING:                                             TORONTO, ONTARIO

DATE OF HEARING:                                               OCTOBER 12, 2005

REASONS FOR JUDGMENT BY:                          EVANS J.A.

CONCURRED IN BY:                                              SEXTON AND SHARLOW JJ.A.

DATED:                                                                      DECEMBER 9, 2005

APPEARANCES:

Ms. Catherine L. De St. Just Ms. Jenny Mboutsiadis	FOR THE APPELLANT
Ms. Catherine B. Flood Ms. Anne Glover	FOR THE RESPONDENT

SOLICITORS OF RECORD:

Department of Justice Tax Law Section Toronto, Ontario	FOR THE APPELLANT
Blake Cassels & Graydon LLP Toronto, Ontario	FOR THE RESPONDENT