Date: 20010502
Docket: 2000-4404-IT-I
BETWEEN:
KRYSTYNA JANKOWSKA-KAMAC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hershfield, J.T.C.C.
[1] This is an appeal under the Informal Procedure from a Notice of Reassessment respecting the Appellant's 1997 taxation year denying an equivalent to spouse credit claimed by the Appellant in respect of her son, Jakub Kamac.
[2] The facts in this matter are not in dispute. The Appellant immigrated to Canada from Poland prior to 1997 and resided in an apartment in North Vancouver, British Columbia throughout the 1997 year (the Appellant's residence). Due to immigration circumstances beyond her control, the Appellant was forced to leave her only child, Jakub, behind, at the age of 9 years. After the Appellant's departure from Poland, Jakub stayed with his aunt, the Appellant's sister, until his immigration arrangements were completed in 1998. Even though Jakub lived with his aunt in Poland, Jakub was dependent for his support, both financial and emotional, on his mother throughout the period of their separation in 1997. The Appellant sent money on a regular basis to her sister to ensure her son's financial support and spoke to her son on a regular basis at least several times a week if not daily at certain times. The Appellant was the sole guardian of Jakub and maintained a close parental relationship with him. During his immigration hiatus, Jakub had no other means of financial support. The Appellant's sister had power of attorney in respect of paper work required to be completed in Poland but it was conceded by the Respondent that Jakub was dependent for support on his mother, the Appellant, who had a caring and attentive relationship with Jakub at all relevant times.
[3] The Appellant acknowledged that at no time in the 1997 year was her son ever physically present in Canada and, accordingly, never lived with the Appellant at the Appellant's residence at any time in the 1997 year.
[4] The issue then comes down to the statutory requirements for the Appellant to claim the equivalent to spouse credit in respect of her son. The statutory provision setting out the conditions precedent to obtaining such credit are in paragraph 118(1)(b) of the Income Tax Act. Respondent's counsel admitted to all facts relied upon by the Appellant in respect of the application of that paragraph except one. It was the Respondent's position that subparagraph (b)(ii) required that at some point in the year Jakub actually live in the Appellant's residence (that is, in the domestic establishment maintained by the Appellant and in which she lived at some point in that year) and that that requirement was not met in this case. The requirements of the Act as set out in subparagraph 118(1)(b)(ii) are as follows:
(b) Wholly dependent person – in the case of an individual who does not claim a deduction for the year because of paragraph (a) and who, at any time in the year,
...
(ii) whether alone 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
(A) except in the case of a child or the individual, resident in Canada,
(B) wholly dependent for support on the individual, or the individual and the other person or persons, as the case may be,
(C) related to the individual, and
(D) except in the case of a parent or grandparent of the individual, either under 18 years of age or so dependent by reason of mental or physical infirmity, ...
[5] Subsection 248(1) defines "self-contained domestic establishment" as follows:
"self-contained domestic establishment" means a dwelling house, apartment or other similar place of residence in which place a person as a general rule sleeps and eats;
[6] The Respondent’s counsel argues that the definition of “self-contained domestic establishment” requires that a dependant child actually live in the Appellant’s residence. Alternatively, he argues that the requirement in subparagraph (b)(ii) that the supporting individual (the Appellant in this case) provide the support “in that establishment” requires that the dependant child actually live in that establishment (the Appellant’s residence).
[7] By definition, the Appellant’s residence is a self-contained domestic establishment if anyone lives in it (that is, eats and sleeps there) and subparagraph (b)(ii) only requires, by additional express language, that the supporting individual live there. The words “in which the individual lives” added parenthetically in subparagraph (b)(ii) underlines that it is the supporting individual that must "live" in the subject establishment. That the provisions in question contain no such express language in respect of the supported child might even suggest that there is no requirement that the supported child live in (eat or sleep in) the subject establishment at any time in the year. Subparagraph (b)(ii) goes further however.
[8] Subparagraph (b)(ii) goes on to require not only that the supporting individual live in the establishment (at any time in the year) but that the support be provided there, “in that establishment”, (at any time in the year). Can support for someone be provided “in” a place without that someone ever being present “in” that place? The Respondent says not and this is the principle issue in this appeal.
[9] The Appellant seeks a liberal construction of the subject provisions of the Act. She argues that administrative practice permits the credit to a parent supporting a child living away from home while attending school (IT-513R) and that any reading of the Act that permits this accommodation should prevail to permit the credit in this case as well.
[10] Contrary to the Appellant's submission, Interpretation Bulletin IT-513R does not seem to entirely abandon a requirement that the supported child away at school have a live-in connection to the supporting parent's residence. At paragraph 16, the Bulletin requires the student to "ordinarily" live with the supporting parent when not at school. While the Bulletin makes the connection between the student and the supporting parent's residence, the notion of where one "ordinarily" lives is laden with interpretative difficulties and goes beyond the language of the section. As such, the Bulletin is not a useful interpretative aid in this case and cannot, in any event, modify the statute.
[11] The Appellant argues that clause (A) of the subject provision suggests a construction of the Act that would not require, at least in the case of the supported person being a child of the supporting person, the physical presence of the supported person in the supporting person’s establishment since that clause permits a supported child to be a non-resident. This argument assumes that clause (A) is directed to a particular fact situation, namely, the case of the supporting individual living in an establishment in Canada and the supported child living outside Canada as a non-resident. If that were the particular fact situation to which Clause A was directed, it might well support a construction of the subject provision that would not take the requirement, that the support occur "in" the establishment, to be a requirement that the supported child "live in" the establishment. However, there is no basis to believe that this is the fact situation contemplated by this clause.
[12] The non-resident exception in clause (A) might ensure the credit where the non-resident child does, in fact, live with a parent at some point in the year. The supported child living away might be a resident in another jurisdiction (say as a student) and still stay in the supporting parent's domestic establishment in Canada for some part of the year without attracting Canadian residence. Clause (A) ensures the credit in such case so its presence in the Act need not be taken to necessarily support a construction of it that allows that support can occur “in” an establishment in Canada without the supported child living there.
[13] The reason for the exception in clause (A) has in fact been attributed to yet another example. That example deals with the case where the domestic establishment is maintained outside of Canada by a supporting individual who lives in that establishment, who is still a resident of Canada by virtue of the expanded definition of "residence" in subsection 250(1) of the Act, but who has a dependant non-resident child living in that establishment. Clause (A) ensures the supporting parent the credit in this example and has been found as providing a sufficient explanation for the addition of clause (A) to quash any suggestion that it supports a construction of subparagraph (b)(ii) that does not require a supported child to live with the supporting parent for the parent to get the credit.[1]
[14] The Appellant has argued that the provisions of the Act should be read in harmony with immigration realities. We are, after all, an enlightened nation whose past, present and future growth is dependent on enlightened immigration practices and enlightened taxation provisions should not penalize families in the process of immigrating. If the policy of the equivalent to spouse credit is to permit a single mother to claim the credit in respect of a wholly dependent child who is actually supported by that parent and who is unequivocally dependent on that parent in virtually every meaningful way, then a temporary immigration barrier should not create a technical hurdle for permitting that credit to the supporting parent. The argument, from a policy point of view, has merit. However, while a liberal construction of the subject credit provision might be equitable in the circumstances of this case, the plain wording of the provision and the consistent judicial findings in respect of such meaning cannot be ignored. Further, the argument relies on acceptance of the notion that a person can be "wholly dependent" within the meaning of paragraph 118(1)(b) and not live with the supporting person. Support can, after all, be provided "from" a place. While that is an arguable premise, it is not reflected in jurisprudence dealing with this paragraph. In Narsing v. The Queen, 98 DTC 6176 the Federal Court of Appeal found that the requirement was clear. To be "wholly dependent" on a supporting taxpayer, the supported person and the supporting person both must live in the same establishment.
[15] While I am not certain why the notion of support need be localized to a particular place, Parliament has provided the subject credit only in the case where, in fact, the support is provided "in" the place where the supporting person resides. Examining the intent of the legislation is not, in this case, helpful in my view. The language of this section is not ambiguous and the courts have been consistent in applying the section as it is written.
[16] Accordingly, the appeal must fail. Any inequity in respect of this finding is a matter for Parliament. As found by Cattanach J. in The Queen v. Scheller, in the context of a case not unlike the one at hand, when the meaning of the provisions in a statute are clear, the courts have nothing to do with their policy or their justice or injustice. The function of the judge is to apply the law as it reads, as to do otherwise would be to abandon the office of judge and assume the office of the legislative branch of government. It mattered not in that case (Scheller) that the Appellant's daughter, being supported by the Appellant, lived apart (in Estonia) from the Appellant by virtue of circumstances beyond his control and through no choice of his. The credit in paragraph 118(1)(b) was denied for the reason that the daughter in that case did not live with the Appellant at any time in the year as required by that provision of the Act. I would regard the remarks of Cattanach J. concerning the role of the courts versus the role of the legislative branch of government to be an invitation to Parliament, made in 1975, to reconsider its policies in situations like those of the Scheller case (i.e. like those of the instant appeal). That invitation has not been taken up by Parliament.
Signed at Ottawa, Canada, this 2nd day of May 2001.
"J.E. Hershfield"
J.T.C.C.
[1] This reason for the exception in Clause (A) is set out in B. Ruzicka v. The Queen, [1994] 1 C.T.C. 2092 (T.C.C.) and Elenita A. Baltazar v. The Queen, [1995] 1 C.T.C. 2877 (T.C.C.). Although the history of clause (A) is not reviewed in these cases, I note that clause (A) was introduced in the early 1980s, effective 1982. Prior to that, indeed in the 1952 version of the Act as well, there was always a requirement that the support of the dependent person be provided "in" the establishment lived in by the supporting person. This requirement, in turn, seems to have consistently been found to require that the supported person actually live in that establishment with the supporting person. See also R. v. Scheller, [1975] C.T.C. 601 (F.C.T.D.) and Émile Tzouvelopoulos v. M.N.R., 63 DTC 889 (T.A.B.); the latter case citing seven other authorities as well.