Date: 20020306
Docket: 96-1362-GST-I
BETWEEN:
GARY W. DEBOER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________
Agent for the Appellant: Eva Jacqueline DeBoer
Counsel for the Respondent: Wayne R. Lonsdale
_______________________________________________________
Reasons for Judgment
(Delivered orally from the bench at Sudbury, Ontario, on May 21, 1998)
Mogan J.
[1] This is an appeal brought under that part of the Excise Tax Act which enacts the goods and services tax legislation. The issue is whether the Appellant can claim a new housing rebate as that phrase is defined and applied in section 256 of the Act. The Appellant has elected the informal procedure.
[2] The facts in this case are very straightforward and they cover two areas. First, concerning the house itself, the Appellant and his wife reside in Sault Ste. Marie, Ontario and decided early in 1991 to build a new home. The new house was located at 1356 Old Garden River Road and the Appellant and his wife acted as their own general contractor. They had enough knowledge to embark on this endeavour themselves and they subcontracted certain areas of skilled trades like electrical and plumbing work, roofing, concrete foundation, etc.
[3] The construction began in April 1991 and the house was liveable by August 1991, at which time the Appellant and his wife moved in. Therefore, they first occupied the premises in August 1991. The other area of fact that is straightforward is that the Appellant and his spouse did have knowledge of the new housing rebate being available. They heard about it in the summer of 1991 but it was only, in their mind, a kind of suggestion, rumour or idea that there was available some kind of new housing rebate.
[4] Immediately after they occupied the new home, the Appellant's wife made a number of inquiries to find out about the new housing rebate. She called Bell Canada looking for an information line for GST information in the Government telephone pages. Bell Canada could not help her, but suggested that she call Revenue Canada in Sudbury which she did but, the person answering the telephone was not aware of the new housing rebate and was not able to give her any useful information.
[5] After more than one inquiry, she was told to call the local Home Builder's Association in Sault Ste. Marie. The person employed by that Association said that he or she did not know anything about the new housing rebate and so she got no useful information. She made a number of other inquiries but, in the latter part of 1991, she could not find out whether there really was a provision permitting a new housing rebate, and if there was, no one was able to tell her how she should go about applying for the rebate, whether there was a formal application or some other method.
[6] The information which the Appellant and his wife had was well founded in the summer of 1991. That is to say, there was a new housing rebate available and it was in the legislation from the time it was enacted on January 1, 1991. And so, although the information was well founded, it was imprecise in the sense that they did not know specifically what the new housing rebate was based upon nor did they have a specific form or application to apply for the rebate.
[7] Three or four years passed and in June 1995, the Appellant's wife was in casual conversation with a friend, Mrs. Maureen Birch, who told her that she, Mrs. Birch, was the in the process of building a new house and applying for the new housing rebate and that it was available and they expected to get it. This renewed the interest of the Appellant and his wife in the new housing rebate and, once again, they made a number of inquiries at the Revenue Canada office trying to track down whether it was available. Finally, contact was made with a Mr. St. Pierre of the Revenue Canada office in Sault Ste. Marie who was able to confirm that the new housing rebate did exist, that it was available, and that there was a certain form that had to be filed for application.
[8] At that point, the Appellant and his wife obtained the form and sometime in the latter part of September or early October 1995, filed the application for the new housing rebate. A photocopy of that application was filed as Exhibit R-1 and it shows a received stamp by the Sault Ste. Marie District Office for Excise Tax on October 13, 1995. The application was reviewed by Revenue Canada and they issued a decision in November 1995 refusing the application and rejecting the idea that a rebate should be paid to the Appellant. An appeal was commenced in this Court from that decision.
[9] The only witness to testify on behalf of the Appellant was his wife, Eva Deboer, who described the facts which I have already summarized: the actual construction of the house and her many, many attempts in good faith to find out specific information as to the availability of the new housing rebate and how one went about applying for it. There is no doubt that Mrs. Deboer is a truthful witness. Everything she said is credible and I had no difficulty believing everything she said. Particularly, I believe that they did have this idea in the summer of 1991 that a new housing rebate was available, but it was only a vague idea in their mind and they lacked precise information as to the nature of the rebate and how one went about applying for it. Accepting the credibility of the Appellant's position, however, does not necessarily win the day for him because I cannot grant a form of relief beyond what Parliament has provided.
[10] Subsection 256(2) of the Excise Tax Act which is part of the GST legislation authorizes the Minister of National Revenue to pay a rebate to an individual in circumstances where the individual has either constructed a new home or substantially renovated a home. Subsection 256(3), however, limits the circumstances in which the rebate will be paid. That subsection states:
256(3) A rebate under this section in respect of a residential complex shall not be paid to an individual unless the individual files an application for the rebate within two years after the earliest of
(a) the day that is two years after the day the complex is first occupied as described in subparagraph 2(d)(i),
(a.1) the day ownership is transferred as described in subparagraph 2(d)(ii), and
(b) the day construction or substantial renovation of the complex is substantially completed.
Subsection 256(3) provides three alternative starting dates for the two-year period. Paragraph (a) is in substance four years after the day when the house was first occupied. Because this house was first occupied in August 1991, a day that is four years later would be a day in August 1995. That day would still have passed before the application was in fact filed in late September or early October 1995. In my view, the earliest effective day would be paragraph (b) because that is the day construction of the house was substantially completed. Mrs. Deboer stated that it was substantially completed in August 1991 because it was liveable and they moved in at that time. Therefore, it seems to me that the earliest of the three dates provided in subsection 256(3) would be a date sometime in August 1991 when the Appellant and his wife occupied the new house.
[11] There was a two-year limitation period after that within which they could have, under the law, applied for the new housing rebate. It was only a two-year limitation period. If they did not apply within that two-year limitation period, they did not qualify for the new house rebate. I do not have jurisdiction to extend that two-year period even in circumstances where I think it may be fair to do so. The equities may be running entirely with the Appellant in this case because the benefit was there under the legislation. They had a vague idea that it was available, but they did not have precise information or the application form to apply for the rebate.
[12] If I were permitted to interpret the legislation in terms of my personal fairness, I would grant the Appellant relief in this appeal but I am not permitted to do that because, if that were the case, the law would be all over the map. Each case would depend upon the personal sense of fairness for each judge. There is a great wealth of cases which limit what a judge can do when interpreting and applying tax legislation. An old rule states that there is no equity in taxation. A judge cannot decide in his or her idea of fairness that the tax ought not to apply here. A judge is required to look at the legislation and apply it according to the law. I will dismiss this appeal because the application for the rebate was not brought within the two-year limitation period.
[13] Concerning the availability of information from Revenue Canada which is the real source of the Appellant's claim, I do not have any information or evidence before me in this appeal. I do recall, along with millions of Canadians, the enactment of the GST legislation and its coming into force in 1991. In particular, I recall how unpopular the new tax was because it is a visible tax which replaced a previously invisible tax. To overcome that excessive unpopularity, there were efforts made to inform the public that there were some benefits available and the new housing rebate was one of them.
[14] There have been quite a number of cases in this Court within the last five or six years involving the new housing rebate. Not all those cases related to whether the application was brought within the two years. Some of those cases related to whether the house exceeded $450,000 in value which was a threshold amount. Others were applications filed within time but related to whether the person actually was entitled to the rebate, whether it was a new house or whether the renovation was substantial enough. There has been litigation coming through this Court under this specific section which indicated to me that people did know about it. There was information out there.
[15] The imprecise information which the Appellant and his wife had is regrettable. It may or may not be the fault of Revenue Canada for not disclosing enough information. I cannot make a determination on that but I know that the rebate was in the legislation from the start. It was one of the benefits available and many people knew about it. As stated, in the circumstances of this case, I do not have the jurisdiction to rely on any sense of fairness to grant relief to people who, being their own general contractor, did not have direct contact with specific sources like home builders or real estate agents who might have been able to help them. The appeal is dismissed.
Signed at Ottawa, Canada, this 6th day of March, 2002
"M.A. Mogan"
J.T.C.C.
COURT FILE NO.: 96-1362(GST)I
STYLE OF CAUSE: Gary W. DeBoer and
Her Majesty the Queen
PLACE OF HEARING: Sudbury, Ontario
DATE OF HEARING: May 21, 1998
REASONS FOR JUDGMENT BY: The Honourable Judge M.A. Mogan
DATE OF JUDGMENT: May 27, 1998
APPEARANCES:
Agent for the Appellant: Eva Jacqueline DeBoer
Counsel for the Respondent: Wayne R. Lonsdale
COUNSEL OF RECORD:
For the Appellant:
Name: N/A
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada