Tax Court of Canada Judgments

Date: 20000803

Docket: 1999-4999-IT-I

BETWEEN:

GLENN HOFFMAN,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Rip, J.T.C.C.

[1] Glenn Hoffman appeals from an assessment of tax for 1997 in which the Minister of National Revenue ("Minister") denied him the unused amount of the disability tax credit of Marianne Boranko, his sister-in-law. The appellant does not question that subsection 118.3(2) excludes a brother or sister of a mentally or physically impaired person to deduct any unused amount of the disability tax credit granted to such person by subsection 118.3(1). However the appellant's position is that subsections 118.3(2) and 252(1) of the Income Tax Act ("Act") should be read consistent with value of the Canadian Charter of Rights and Freedoms ("Charter"), specifically section 15 and, therefore, the definition of "child" for the purposes of section 118.3(2) includes a "sister". The word "sister" should be read into subsections 118.3(2) and 252(1) of the Act.

[2] Subsection 118.3(1) permits a mentally or physically impaired person to deduct from tax otherwise payable under Part I of the Act a tax credit not excluding $4,118. If the credit cannot be used by the mentally or physically impaired person that person may, in accordance with subsection 118.3(2), transfer the unused portion of the tax credit to a child, grandchild, parent or grandparent or to the person to whom the impaired person is fully dependent upon.

[3] Marianne Boranko resides with Mr. Hoffman and his family. Mr. Hoffman is married to Ms. Boranko's sister. Mr. Hoffman is a child and youth counsellor. Mrs. Hoffman is a field supervisor of home support workers. They have two children. Before her mother's death in 1995 Ms. Boranko lived with her mother. Mrs. Hoffman promised her mother that she would take care of Ms. Boranko upon their mother's death.

[4] Ms. Boranko who is 26 years of age suffers from cerebral palsy and is also mentally impaired. Mrs. Hoffman tries to make Ms. Boranko as independent as possible and has arranged for her to do certain work which is supported by government assistance programs. Ms. Boranko, in 1997, received "about" $90 every two months for work as well as the government benefits of $771 per month.

[5] Mrs. Hoffman testified that her sister cannot live by herself and requires the aid of other persons. Ms. Boranko has a short-term memory. She loses touch of where she is and requires help to do basic activities. She is able to shower but Mrs. Hoffman gives her a bath once a week. She is prescribed anticonvulsant medication but must be reminded to take the medicine. Mrs. Hoffman says that her sister requires "consistent supervision". Mrs. Hoffman has taken upon herself and her family to care for Ms. Boranko and to tend to her physical and intellectual needs. There is no question in my mind that Mr. and Mrs. Hoffman are unselfish in their responsibilities towards Ms. Boranko.

[6] Subsection 118.3(2) does not permit Mr. Hoffman to deduct, for the purposes of computing his tax, any amount of the mental and physical impairment tax credit not used by Ms. Boranko. The Minister is of the view that Mrs. Hoffman is not Ms. Boranko's parent, grandparent, child or grandchild nor does Ms. Boranko meet the definition of the extended meaning of "child" as defined by subsection 252(1) of the Act.

[7] Subsection 15(1) of the Charter states:

15. (1) 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.

[8] Paragraph 118.3(2)(a) of the Act provides that:

Where

(a) an individual has, in respect of a person (other than a person in respect of whom the person's spouse deducts for the year an amount under section 118 or 118.8) who is resident in Canada at any time in a taxation year and who is entitled to deduct an amount under subsection (1) for the year, claimed for the year a deduction under subsection 118(1) because of

(i) paragraph (b) of the description of B in subsection 118(1), or

(ii) paragraph (d) of the description of B in subsection 118(1) where that person is the individual's child or grandchild,

or, where that person is the individual's parent, grandparent, child or grandchild, could have claimed such a deduction if the individual were not married and that person had no income for the year and had attained the age of 18 years before the end of the year, . . .

there may be deducted for the purpose for computing the tax payable under this Part by the individual for the year, the amount, if any, by which . . .

[9] While the appellant's Notice of Appeal alleges the fact that the word "child" does not include a sister is a violation of the Charter, that is not the real issue before me. What is before me is whether the appellant's Charter rights, namely subsection 15(1), are violated by subsection 118.3(2) of the Act, in particular paragraph (a). Subparagraph 118.3(2)(a)(ii) and the closing words of paragraph (a) grant a benefit to parents, grandparents, children and grandchildren of the impaired person but not to siblings or cousins of the impaired person who care for him or her. Parents, grandparents, children and grandchildren are lineal ascendants and descendants of the impaired person. Siblings and cousins, for example, are related to the impaired person but are not lineal descendants or ascendants of that person.

[10] The appellant is a member of a group of caregivers of relatives of dependants who are not children, grandchildren or parents. The distinction is not based on the personal characteristic of the dependant person. While the appellant may be eligible for other tax credits under section 118, for example, the appellant is not entitled to a transfer of the unused portion of the impaired person's tax credit in subsection 118.3(2).

[11] In Law v. Canada (Minister of Employment and Immigration)[1], the Supreme Court of Canada stated that the purpose of subsection 15(1) was:

. . . to prevent the violation of essential human dignity and freedom through the imposition of disadvantage, stereotyping, or political or social prejudice, and to promote a society in which all persons enjoy equal recognition at law as human beings or as members of Canadian society, equally capable and equally deserving of concern, respect and consideration.

[12] In Andrews v. Law Society of British Columbia,[2] McIntyre J. described discrimination:

. . . as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burdens, obligations, or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits, and advantages available to other members of society. Distinctions based on personal characteristics attributed to an individual solely on the basis of association with a group will rarely escape the charge of discrimination, while those based on an individual's merits and capacities will rarely be so classed.

[13] In Andrews, the Supreme Court adopted a two-step approach to subsection 15(1) of the Charter. The first step is to determine whether there was a distinction based on personal characteristics. The second step is to determine whether the distinction results in discrimination, because it was recognized that not every distinction would result in discrimination. Appellant's counsel relied upon the Supreme Court decision in Law, which held that a three-step analysis must be made to determine a discrimination claim under subsection 15(1) of the Charter:

First, does the impugned law (a) draw a formal distinction between the claimant and others on the basis of one or more personal characteristics, or (b) fail to take into account the claimant's already disadvantaged position within Canadian society resulting in substantively differential treatment between the claimant and others on the basis of one or more personal characteristics? If so, there is differential treatment for the purpose of s. 15(1). Second, was the claimant subject to differential treatment on the basis of one or more of the enumerated and analogous grounds? And third, does the differential treatment discriminate in a substantive sense, bringing into play the purpose of s. 15(1) of the Charter in remedying such ills as prejudice, stereotyping, and historical disadvantage?[3]

[14] The Supreme Court concluded that:

. . . An infringement of s. 15(1) of the Charter exists if it can be demonstrated that, from the perspective of a reasonable person in circumstances similar to those of the claimant who takes into account the contextual factors relevant to the claim, the legislative imposition of differential treatment has the effect of demeaning his or her dignity.[4]

[15] The issue in Law involved age qualifications with respect to eligibility requirements for survivor pensions. Where the surviving spouse was under the age of 35 no pension was available. The Supreme Court held that there was a differentiation on the basis of grounds enumerated in subsection 15(1), that of age. However the distinction did not impair the claimant's human dignity and therefore subsection 15(1) was not offended. It would therefore appear that a distinction based on an enumerated or analogous grounds would not amount to discrimination under subsection 15(1) unless the distinction was also a violation of essential human dignity.[5]

[16] Appellant's counsel took the position that a formal distinction is drawn between the appellant (and Mrs. Hoffman) and other near relatives. He contended that being a person's sibling is a personal characteristic for the purpose of subsection 15(1) of the Charter. In this regard counsel relied on Collins v. Canada[6] for the proposition that a characterization of an individual's status vis-à-vis another person is a personal characteristic. With respect to the first stage of inquiry under subsection 15(1), appellant's counsel concluded that the appellant's wife is denied a benefit for the sole reason that she is an impaired person's sister and not the impaired person's parent or grandparent. This denial imposes substantively different treatment.

[17] Appellant's counsel concedes that there is no legal authority holding that being a brother or sister is analogous, nor that being a brother or sister is a family status. However, he argues that "being near family members comes under the definition of family status". Counsel also referred to the comments of Mr. John R.A. Douglas of the Canadian Human Rights Tribunal in Schapp v. Canada (Canadian Armed Forces)[7], with respect to the definition of the expression "family status", and, in particular, his view that the natural and ordinary meaning of the expression "family status" includes, among other things, the relationship between siblings. Counsel submitted that "family status" is a ground of discrimination in many human rights legislation. Counsel referred to McIntyre J. in Andrews who stated that a discriminatory burden or denial of a benefit is to be understood in the context of the historical development of the human rights codes.[8]

[18] To determine whether there was discrimination in the substantive sense, counsel for the appellant cited Collins, paragraphs 33 and 34, with reference to the "human dignity approach" adopted in Law, to analyse whether a legislative distinction based upon an analogous ground is discriminatory in the substantive sense.

[19] Counsel conceded that there is no pre-existing disadvantage, stereotyping, prejudice or vulnerability experienced by the appellant. However, he argued that similarly to parents and grandparents, brothers and sisters do care for their impaired siblings out of family responsibility and therefore brothers and sisters have the same needs and capabilities as the parents and grandparents. Legislation must take into account the actual needs and capabilities of the claimant or it is likely to have a negative effect on human dignity.[9]

[20] In Collins, Rothstein J.A. held that the group that was excluded from the legislation was not more advantaged than the individuals being targeted by the legislation, therefore, it cannot be said that the legislation had an ameliorative purpose or effect for the group. This finding should apply to the appeal at bar as well. Rothstein J.A. referred to Law and stated that:

[l]egislation which seeks to ameliorate disadvantage already suffered by certain individuals or groups in society may not offend subsection 15(1) of the Charter even though it excludes certain other individuals or groups. However, this will only be the case where the group that is excluded from the legislation is more advantaged in a relative sense than those the legislation seeks to assist.[10]

[21] With respect to the nature of the interest affected, counsel suggested that the question to ask is "whether the distinction restricts access to a fundamental social institution, or affects a basic aspect of full membership in Canadian society, or constitutes a complete non-recognition of a particular group": Collins[11]. Appellant's counsel submitted that the exclusion of siblings from the benefit under the Act implies that siblings are less in need of this type of tax benefit regardless of their actual circumstances and therefore denies them access to a basic component of federal government assistance.

Analysis

[22] There is no doubt that there is a clear distinction drawn by subsection 118.3(2) of the Act between siblings caring for an impaired dependant and parents, grandparents, children and grandchildren caring for an impaired dependant. Not every person in a family who cares for an impaired relative is entitled to the transfer of the credit. There is a distinction between persons caring for children, parents and grandparents as opposed to those caring for other relatives, such as siblings, and the Act gives a benefit to the former and not to the latter. This formal distinction results in differential treatment.

[23] In Miron v. Trudel[12] McLachlin J. (as she then was) observed, at pages 495-96, that:

The grounds of discrimination enumerated in s. 15(1) of the Charter identify group characteristics which often serve as irrelevant grounds of distinction between people. . . . Logic suggests that in determining whether a particular group characteristic is an analogous ground, the fundamental consideration is whether the characteristic may serve as an irrelevant basis of exclusion and a denial of essential human dignity in the human rights tradition. In other words, may it serve as a basis for unequal treatment based on stereotypical attributes ascribed to the group, rather than on the true worth and ability or circumstances of the individual? An affirmative answer to this question indicates that the characteristic may be used in a manner which is violative of human dignity and freedom.

[24] McLachlin J. describes several indications of analogous grounds that have been heard by the Supreme Court: historical disadvantage, Andrews, supra, at page 152 per Wilson J.; Turpin, supra, at pages 1331-32; the fact that the group constitutes a "discrete and insular minority", Andrews, supra, at page 152 per Wilson J., the fact that distinction is made based on personal characteristics, Andrews, supra, at pages 174-75 per McIntyre J., and distinctions made on personal and immutable characteristics, Andrews, supra, at page 195 per La Forest J. Analogous grounds include sexual orientation, marital status and citizenship. It does not include family status.

[25] In my view subsection 15(1) of the Charter has not been infringed by subsection 118.1(2) of the Act because the differential treatment is not on the basis of an enumerated or analogous grounds. There is a distinction between relatives of the impaired person. Lineal descendants and ascendants of the impaired person may get a benefit that other relatives do not. This is not unusual in our society; an intestate dies leaving no spouse the estate devolves first upon ascendants and descendants of the deceased.[13] Their status within the family group is different. In any event there is no evidence that caregivers of impaired relatives are a group that is historically disadvantaged in the context of their place in the social, political and legal fabric of our society. Linden J.A. wrote in Schachtschneider v. The Queen:

. . . However, the issue at this stage of the analysis is not whether the impugned legislation disadvantages the individual or group in question, but whether the individual or group is independently disadvantaged, so as to fit within the primary purpose of section 15 - namely to remedy or prevent discrimination against groups subject to stereotyping, historical disadvantage and political and social prejudice in Canadian society. Married persons do not meet this description, and, hence, cannot be considered discriminated against merely because they are treated differently by paragraph 118(1)(b).[14]

[26] If the legislation does make a formal distinction based on analogous grounds, then one must determine whether the different treatment discriminates in a substantive sense, bringing into play the purpose of subsection 15(1) of the Charter in remedying such ills as prejudice, stereotyping and historical disadvantage.

[27] Appellant's counsel states that the legislative distinction at issue violates the human dignity of the appellant. I cannot find that the purpose and effect of subsection 118.3(2) violates essential human dignity and freedom through the imposition of disadvantage, stereotyping, or political or social prejudice. The law, in purpose or effect, conforms to a society equally capable and equally deserving of concern, respect and consideration.[15] Counsel for the appellant has not demonstrated that either the purpose or effect of subsection 118.3(2) violates the appellant's human dignity so as to constitute discrimination. Siblings have not been consistently and routinely subjected to the sorts of disadvantage, stereotyping or political or social prejudice faced by other discrete and insular minorities.

[28] As Gonthier J. stated in Thibaudeau v. Canada:[16]

It is of the very essence of the ITA to make distinctions, so as to generate revenue for the government while equitably reconciling a range of necessarily divergent interests. In view of this, the right to the equal benefit of the law cannot mean that each taxpayer has an equal right to receive the same amounts, deductions or benefits, but merely a right to be equally governed by the law.

. . .

That being the case, one should not confuse the concept of fiscal equity, which is concerned with the best distribution of the tax burden in light of the need for revenue, the taxpayers' ability to pay and the economic and social policies of the government, with the concept of the right to equality, which as I shall explain in detail later means that a member of a group shall not be disadvantaged on account of an irrelevant personal characteristic shared by that group.

[29] The very essence of the Act is to make distinctions and these distinctions should not confuse fiscal equality with the concept of the right to equality. The Courts should be cautious in second guessing Parliament's economic and social distinctions.

[30] Fortunately for taxpayers like the Hoffmans, the government announced in its last budget that the disability tax credit will be broadened to allow the transfer of unused amounts to an expanded list of supporting relatives, including brothers and sisters.[17] This proposed amendment to the Act does not help the appellant for 1997. Therefore I asked counsel for written submissions that if I could find Mr. and Mrs. Hoffman in loco parentis to Ms. Boranko, whether the appellant could succeed in his appeal.

[31] Subsection 252(1) of the Act defines "child" as follows:

(1) In this Act, words referring to a child of the taxpayer include

(a) a person of whom the taxpayer is the natural parent whether the person was born within or outside marriage;

(b) a person who is wholly dependent on the taxpayer for support and of whom the taxpayer has, or immediately before the person attained the age of 19 years had, in law or in fact, the custody and control;

(c) a child of the taxpayer's spouse;

(d) an adopted child of the taxpayer; and

(e) a spouse of a child of the taxpayer.

[32] The list of persons defined as children in subsection 252(1) does not include a sister of the taxpayer's spouse and the definition of "child" should not include a person for whom an individual stands in loco parentis. Courts must be cautious before finding within the clear provisions of the Act an unexpressed intention of Parliament.[18]

[33] In Ogg-Moss v. The Queen,[19]Dickson J., as he then was, discussed the meaning of "child" and found that an individual could not stand in loco parentis to an adult because the adult was not a child. He stated, at pages 187-8:

If mentally retarded adults are to be considered "children" solely on the basis of their dependency on a "parenting" figure, it is difficult to see how the category of "children" would be limited to the mentally retarded. Essentially the same argument could be made with regard to the functional relationship between the sufferers from senility or other cognitive disorder, or perhaps even stroke victims or other invalids, and those who take care of them. If an inability to tend to one's basic needs, or an inability, because of one's mental state, to function unassisted in society, are indices of "childishness", then the category of adults subject to correction is a very broad one indeed. I do not believe that a functional analysis of childlike dependency is appropriate in these latter cases and for similar reasons I cannot accept it with regard to mentally retarded adults.

A mentally retarded adult is not a child in fact, nor for the purposes of the law in general, nor for purposes of s. 43 of the Criminal Code in particular. [Emphasis added]

This reasoning would apply to all impaired adults.

[34] The appeal is dismissed.

Signed at Ottawa, Canada, this 3rd day of August 2000.

"Gerald J. Rip"

J.T.C.C.

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