Date: 20010608
Docket: 2001-72-IT-I
BETWEEN:
FRANK YATES,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
For the Appellant: The Appellant himself
Counsel for the Respondent: Kristy Foreman Gear
Reasons for Judgment
(delivered orally from the Bench on May 11, 2001, at Vancouver, British Columbia)
Campbell, J.
[1] This appeal is under the informal procedure with respect to the Appellant's 1999 taxation year.
[2] The Minister initially assessed the Appellant by Notice dated May 18, 2000. By letter dated August 24, 2000, the Appellant objected that the Minister did not allow him a deduction for Class 3 National Insurance contributions. By letter dated October 6, 2000, the Appellant objected that the Minister did not allow him a deduction for the non-uprated portion of the United Kingdom ("U.K.") old age pension as a foreign tax. As a result, the Minister, by Notice dated October 13, 2000, confirmed that there was no provision under the Income Tax Act (the "Act") which allowed a deduction for Class 3 National Insurance contributions made by the Appellant in the amount of $781.41.
[3] There is basically no dispute as to the facts in this case and both parties proceeded on the basis of presentation of legal argument. The Appellant resided in England until 1972 when he came to Canada to live. He is a dual citizen of both countries. From 1967 to 1972, the Appellant worked in England and contributed to a National Insurance plan. In 1991 or 1992, the Appellant was advised by a friend that he could apply for and pay a lump sum payment to permit him to qualify for 82% of a future U.K. pension. As a result, the Appellant paid the U.K. Inland Revenue Department a lump sum payment of 4,009.92 U.K. pounds sterling, in 1991 or 1992 for the period 1986 to 1992 under Class 3 National Insurance contributions. The amount paid by the Appellant in the 1999 taxation year was 335.40 U.K. pounds sterling (as per Attachment I attached to the Notice of Appeal and being a statement from the U.K. Inland Revenue NI Contributions Office).
[4] The Appellant divided his Notice of Appeal and presentation into two parts. The first part dealt with the deductibility of "additional U.K. Class 3 National Insurance contributions" in computing Canadian income tax in the 1999 taxation year. The second part dealt with the deductibility of the "non-uprated portion of the U.K. old age pension, withheld by the U.K. Government to U.K./Canadian citizens, resident in Canada. He argued that this was a tax and should be "deductible" or a "tax credit" given against the amount of foreign income reported or Canadian tax payable on the foreign source of income.
[5] In respect to Part 1, the Appellant paid Class 3 National Insurance contributions to the U.K. Inland Revenue Department towards a future state pension. He referred to a statement of the U.K. Inland Revenue NI Contributions Office, which referred to these payments as "voluntary" yearly Class 3 contributions and I quote directly from that statement:
You applied to us to pay voluntary class 3.
He stated that he was informed these additional contributions made to increase his future U.K. old age pension were not deductible in computing Canadian income taxes.
[6] The Appellant referred to subsections 20(11), 20(12), 126(1) and 126(7) of the Act. He argued that these Class 3 contributions are a tax and therefore should be deductible or an allowable tax credit against the amount of foreign income reported, or Canadian tax payable on the foreign source of income in compliance with these subsections. He stated that the contributions meet the definition of "non-business income tax" in subsection 126(7), in that they are a tax, based on income paid to the U.K. At the very least, he states that the contributions should be an allowable deduction or credit against foreign income tax reported, or deductible against Canadian tax payable on the foreign source income. He states that when he pays the contributions, he does so with after-tax dollars and he is of the opinion that these amounts are taxed several times. He states:
I understand in my own particular situation that I do not have any income from a foreign source, but I believe in the interests of fairness and Natural Justice that CCRA should change their policy ...
He contends that all of this violates the Canada/U.K. Income Tax Convention. He further contends that the "disallowance of a deduction or use as a tax credit" for such Class 3 U.K. pension contribution violates the Canadian Charter of Rights and Freedoms by treating a Canadian citizen paying into a Canadian state pension differently than a Canadian citizen paying into a U.K. state pension. He believes the ground of discrimination to be the enumerated ground of national origin.
[7] The second part of the Appellant's argument related to the future event of the taxability of his U.K. old age pension when he eventually reaches 65 years of age. The U.K. Government has a policy of "non-uprating" meaning "not annually increasing" the U.K. old age pension to persons living abroad as a resident of Canada. This policy has been in effect since 1955. He contends that a policy exists which "freezes" a portion of his pension. He submitted that as the non-uprated portion of the U.K. old age pension is a tax, based on income, the disallowance of a deduction or use of a tax credit for this non-rated portion violates Articles 17, 21, 22 and 23 of the Canada/U.K. Convention. He recognizes that the receipt of his old age pension will be taxable as part of his worldwide income. He states that the U.K. Government will withhold the "frozen portion" from his pension and will use those monies for Government purposes. He contends that the "frozen portion" is a tax based on income which is taxable in Canada as part of the Canadian resident's worldwide income. He contends that all of this violates mobility rights in respect of section 6 of the Charter, legal rights in respect of section 7 of the Charter and equality rights in respect to section 15 of the Charter.
[8] And finally the Appellant argued that the U.K. old age pension is property and therefore the tax imposed by the U.K. Government is a tax on that property. The Appellant, as I understand it, contends that in disallowing a deduction or tax credit on the taxed portion of the U.K. pension which is property, it deprives property rights to Canadians whose national origin is the U.K. This therefore violates subsection 1(a) of the Canadian Bill of Rights according to the Appellant, in that it deprives property rights on the ground of national original.
[9] The Minister states that the Appellant applied to the U.K. Inland Revenue to pay the contributions, that these contributions are voluntary and that they are not an income or profit tax. The Minister states that the contributions do not qualify as a "non-business-income tax" and that for the 1999 taxation year, the Appellant did not declare any income from foreign sources. The Minister then contends that the relief sought with respect to the "non-uprated portion" of the U.K. old age pension is not within the available relief that this Court may grant under section 171 of the Act, as the Appellant seeks relief in respect to a future event.
[10] By letter from the Appellant dated April 2, 2001, he asserts that he has served all Attorneys General in compliance with section 57 of the Federal Court Act. Although this was not raised by either party during the hearing, it is the practice of this Court to hear argument on Charter issues where they are raised in the pleadings but section 57 notice requirements may not have been met. If there is merit to the Charter arguments, the matter would be adjourned to a further date for compliance with notice requirements. If there is no merit, the matter can be disposed of accordingly. I reviewed this practice at greater length in my decision in Whalen v. R., [2001] T.C.J. No. 81.
Issues
[11] There are four issues before me, which are as follows:
(1) whether the U.K. Class 3 National Insurance contributions are non-business income;
(2) whether the Appellant is entitled to a deduction or a foreign tax credit for the contributions in the 1999 taxation year;
(3) whether the Court can provide any relief by way of deduction or tax credit with respect to the "non-uprated" portion of the U.K. old age pension; and
(4) whether the denial of the deduction or foreign tax credit infringes rights and freedoms under the Charter and specifically a breach of sections 6, 7 and 15 and whether that breach can then be justified under section 1.
Analysis
[12] The Appellant has objected to the non-deductibility of voluntary contributions he made to the U.K. Government to maintain his entitlement to a U.K. old age pension.
[13] Subsection 126(1) of the Act provides a formula for calculating a foreign tax deduction, where a taxpayer, who was resident in Canada at any time in a taxation year, paid non-business-income tax to a Government of a country other than Canada. The effect of the formula in subsection 126(1) is that a foreign tax credit cannot exceed the amount of Canadian tax that would have been payable on the foreign income had that income been earned in Canada. "Non-business-income tax" is defined in subsection 126(7) as follows:
"non-business-income tax" paid by a taxpayer for a taxation year to the government of a country other than Canada means, subject to subsections (4.1) and (4.2), the portion of any income or profits tax paid by the taxpayer for the year to the government of that country, or to the government of a state, province or other political subdivision of that country, that
(a) was not included in computing the taxpayer's business-income tax for the year in respect of any business carried on by the taxpayer in any country other than Canada,
(b) was not deductible by virtue of subsection 20(11) in computing the taxpayer's income for the year, and
(c) was not deducted by virtue of subsection 20(12) in computing the taxpayer's income for the year,
but does not include a tax, or the portion of a tax,
(c.1) that is in respect of an amount deducted because of subsection 104(22.3) in computing the taxpayer's business-income tax,
(d) that would not have been payable had the taxpayer not been a citizen of that country and that cannot reasonably be regarded as attributable to income from a source outside Canada,
(e) that may reasonably be regarded as relating to an amount that any other person or partnership has received or is entitled to receive from that government,
(f) that, where the taxpayer deducted an amount under subsection 122.3(1) from the taxpayer's tax otherwise payable under this Part for the year, may reasonably be regarded as attributable to the taxpayer's income from employment to the extent of the lesser of the amounts determined in respect thereof under paragraphs 122.3(1)(c) and (d) for the year,
(g) that can reasonably be attributed to a taxable capital gain or a portion thereof in respect of which the taxpayer or a spouse of the taxpayer has claimed a deduction under section 110.6,
(h) that may reasonably be regarded as attributable to any amount received or receivable by the taxpayer in respect of a loan for the period in the year during which it was an eligible loan (within the meaning assigned by subsection 33.1(1)), or
(i) that can reasonably be regarded as relating to an amount that was deductible under subparagraph 110(1)(f)(i) in computing the taxpayer's taxable income for the year;
[14] Non-business-income tax does not include a tax or portion thereof that would not have been payable had the taxpayer not been a citizen of that county and that cannot be reasonably regarded as attributable to income from a source outside Canada.
[15] The Respondent has submitted that these Class 3 insurance contributions are not a non-business-income tax under the Act as the contributions are not income or profits tax.
[16] Are these contributions a tax? Judge Hamlyn of this Court in Kempe v. R. [2001] 1 C.T.C. 2060 had to determine whether a German state imposed church tax qualified for a deduction of foreign tax. In referring to the Supreme Court of Canada decision in Lawson v. Interior Tree Fruit and Vegetable Committee of Direction, [1931] S.C.R. 357 Judge Hamlyn stated:
A tax is a levy, enforceable by law imposed under the authority of a legislature, imposed by a public body and levied for a public purpose.
[17] The test for the essentials of a tax were confirmed in Attorney-General of Canada v. Registrar of Titles of Vancouver Land Registration District, [1934] 4 D.L.R. 764 as follows:
The tests are (1) it must be enforceable by law (2) imposed by a public body under legislative authority and for a public purpose. In addition "compulsion is an essential feature" (Halifax v. Nova Scotia Car Works (1914), 18 D.L.R. 649, at p. 652).
[18] These requirements have been confirmed in such later cases as M.N.R. v. The Shawinigan Water and Power Co., 53 DTC 1036.
[19] In the case of Kempe, Judge Hamlyn found that the church tax was a compulsory obligation and that the ability of avoiding the tax by giving up citizenship or church membership did not make it any less a tax. In the present case, the Appellant became a resident of Canada and reported no foreign income from the U.K. The Appellant admitted that he chose voluntarily to continue making contributions towards the U.K. insurance plan. The exhibits which he presented, including the website information of the National Insurance Plan and the statements of the amount that was payable, refer to these Class 3 contributions as voluntary. According to the Appellant's evidence, when he worked in the U.K. he was required to make contributions on a weekly basis, which amounts were taken directly off his cheque and submitted. As pointed out by Respondent counsel, these payments were akin to CPP premiums in Canada, where the regime is structured so that payments are compulsory. When the Appellant left the U.K. for Canada in the 1970's he no longer made contributions to this plan and in fact made his first payment again only in 1993, after discussions with a friend prompted him to do so. The Appellant voluntarily applied to pay these contributions in order to maintain an old age pension in the U.K. The Appellant is clearly not obliged to pay these contributions. They are voluntary, not compulsory.
[20] Black's Law Dictionary defines "tax" as follows:
A charge by the government on the income of an individual, corporation, or trust, as well as on the value of an estate or gift or property. The objective in assessing the tax is to generate revenue to be used for the needs of the public.
A pecuniary burden laid upon individuals or property to support the government, and is a payment exacted by legislative authority. Essential characteristics of a tax are that it is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority.
[21] I agree with counsel for the Respondent that the case of Kempe can be distinguished from the present case as the church tax in Kempe was determined to be a tax due to its compulsory nature and that it was required by the laws of Germany. All evidence presented here however points to the payments being voluntary. The Class 3 contributions were not calculated as a percentage of income earned as no income was being earned in the U.K. All evidence of the Appellant referred to the entitlement of the U.K. citizens to apply to make contributions if they so wished or on a voluntary basis. The contributions were a minimum qualification amount rather than based on income earned. If a U.K. citizen wanted to make these contributions he had to meet a minimum requirement of working three years in the U.K. Thereafter these contributions could be made voluntarily in the expectation of receiving a benefit of old age pension. The Appellant had a choice of making these contributions. They were not compulsory in any sense of the word. In fact the Appellant in his evidence stated that if he ceased to make the yearly contributions referred to in these statements, nothing further happened. He simply would not receive future statements from the U.K.
[22] The Appellant argued that his contributions were not voluntary because of the pressure and duress he felt surrounding the freezing of the non-uprated portions of the old age pension. He cited case law in support of this. However these cases are distinguishable. I agree with Respondent counsel when she stated that the issue, quite rightly here, is whether a certain type of payment is a tax. And for it to be a tax it must be compulsory. In any event, the Appellant had been advised his old age pension would be frozen at 65 and frozen at the amount of his first cheque. He was further advised that he could choose to make voluntary contributions and clearly indicated in his evidence that he chose to make these contributions to the U.K. plan rather than some other type of investment, as it was a guaranteed reliable state pension that was, to use his words, "a good investment". Although the Appellant argued they were made under pressure, I find no such duress in his decision to make those contributions.
[23] As stated earlier for an amount to qualify as a non-business-income tax, it must reasonably be regarded as attributable to income from a source outside Canada. The Appellant's 1999 return (filed as Exhibit R-1) reports no foreign-source income and the Appellant's evidence was that he had not received any U.K. income. The contributions were paid from income from Canadian employment. As such the contributions cannot be attributable to income from a source outside Canada.
[24] A final comment in respect to this issue comes from a reference to the tax period by Respondent counsel in her summation. The amount of 4,009.92 U.K. pounds was paid in 1993 for the period 1986 to 1992-93 as a lump sum catch-up amount. Respondent counsel submitted that only the amount paid in 1999 of 335.4 U.K. pounds would be allowable as a deduction as the amount paid in the year under appeal. I believe I understood Respondent counsel to make this argument should it be determined that these contributions are deductible or a tax credit. In any event, for the reasons given here, I find that the contributions do not meet the requirements of being a non-business-income tax.
[25] I turn now to the second issue which is the Appellant's entitlement to a deduction or a foreign tax credit for a contribution in 1999 taxation year. Respondent counsel cited several cases to support her submission that there is no provision in the Act for a deduction of contributions paid to a foreign insurance plan. In the case of Bransted v. M.N.R., [1992] T.C.J. No. 2, the Appellant there claimed a federal foreign tax deduction for tax paid on social security benefits to the U.S. The social security benefits were however tax exempt in the U.S. and at page 6 Judge Sobier stated:
Paragraph 4(a) of the Convention allows a deduction in respect of income tax paid or accrued to the United States in respect of profits, income or gains which arise in the United States. This income did arise in the United States, but because no tax was paid to or accrued to the United States in respect of these benefits, they cannot be included in a calculation of tax paid to the United States.
[26] In the case before me, as no tax was paid, the Appellant can have no entitlement to a deduction or a tax credit for an amount paid to a foreign country. The Appellant made the contributions with after tax dollars and accordingly he will be taxed on that income upon receipt of benefits. There is no breach of the U.K./Canada agreement. The contributions were not a tax so there can be no double taxation.
[27] There is no provision in the Act to permit the deduction of the contributions paid to a foreign pension plan. In Ledwidg v. M.N.R., 71 DTC 188 the Court held, in discussing contributions to a French National Fund by a former citizen of France:
... the contribution ... is not a registered pension plan or a plan accepted by the respondent. The Income Tax Act denies the right to deduct such contributions from income earned in Canada.
... there is nothing in the Canadian Income Tax Act which permits the deduction of a tax in futuro. What is deductible is the tax paid during or for the taxation year involved. A contribution to a pension plan is not assimilated to a tax. It may or may not in the years to come, give rise to a levy because when the taxpayer receives the pension he contributed to, he receives an income which is taxable. Let's wait until then. For income tax purposes, the possibility of an event produces no relief.
[28] Respondent counsel also quoted the case of Stelfox v. M.N.R., 85 DTC 100. The facts in Stelfox are almost identical to the facts before me. The Court found there was no provision for the deduction as the contributions were not an investment but were more akin to the payment of insurance premiums such as CPP or RSP which are deductible only when a specific provision is made in the Act for such a claim. In The Queen v. Hoffman, 85 DTC 5508, the Court there held:
If Parliament wanted to include, as a deduction against employment income, contributions made "to a similar plan of a country other than Canada", it would have done so. That Parliament expressly chose to include the phrase in respect of a provision concerned with the determination of maximum allowable deductibility limits of premium contributions, yet did not expressly do so in relation to paragraph 8(1)(l), indicates that contributions paid under social security are not allowable deductions within the meaning of paragraph 8(1)(l).
[29] The Act is clear, as is the case law. The Act contains no provision to allow a deduction of contributions paid to a foreign insurance plan.
[30] With respect to the third issue, the Appellant's position as outlined in Part II of his Notice of Appeal is as follows:
I believe that when I receive my United Kingdom old age pension at the age of 65, the present policy of 'freezing' (no annual uprating) at that time will result in a violation to the Canada-UK double Taxation Agreement. Also it should be noted that this also presently adversely affects existing Canadian pensioners resident in Canada in receipt of a United Kingdom old age pension.
It is acknowledged that upon receiving my old age pension at age 65, it will be taxable in Canada as part of my worldwide income.
When you reside in Canada as a United Kingdom pensioner, your old age pension is 'frozen'.
The United Kingdom government will withhold the 'frozen portion' of my old age pension 'at source' and those monies withheld by the Government are used for Government purposes such as payment towards social security or simply go into the United Kingdom Treasury.
...
The non-uprated portion of a UK old age pension withheld by the UK Government to a UK/Canadian citizen resident in Canada is in fact a TAX and should be 'deductible' or a 'tax credit' against the amount of foreign income reported, or Canadian tax payable on the foreign source income.
[31] The problem the Appellant complains of is with respect to a future event but which does not relate to the Appellant's assessment for the 1999 taxation year. The jurisdiction of this Court stems from section 12 of the Tax Court of Canada Act. The available relief under the Income Tax Act for an appeal from an assessment is found in section 171. This Court may dispose of an appeal by dismissing it, allowing it and vacating the assessment, varying the assessment or referring the assessment back to the Minister for reconsideration and reassessment.
[32] It would appear that the relief sought by the Appellant under Part II of his submissions is declaratory in nature. He did not report foreign source income in 1999 nor did he receive U.K. old age pension. This Court has no authority to provide the relief which the Appellant seeks. Although the Appellant produced documentary evidence expressing the Canadian Government's concerns over the unfairness of the U.K. policy and the attempts being made to convince the U.K. to remedy this by changing its policy, this Court can offer no assistance to the Appellant as there is no jurisdiction for it to do so.
[33] The fourth and final issue I must deal with is whether the denial of a deduction of Class 3 contributions violates and infringes upon any rights and freedoms under the Charter, specifically sections 6, 7 and 15.
[34] The Appellant states that as a result of the disallowance of the deductibility of his contributions, his mobility rights have been violated pursuant to section 6 of the Charter. Subsection 6(1) states:
Every citizen of Canada has the right to enter, remain in and leave Canada.
Subsection 6(2) states:
Every citizen of Canada and every person who has the status of a permanent resident of Canada has the right
(a) to move to and take up residence in any province; and
(b) to pursue the gaining of a livelihood in any province.
[35] In Canadian Egg Marketing Agency v. Pineview Poultry Products Ltd. and Frank Richardson operating as Northern Poultry, [1998] 3 S.C.R. 157 the Supreme Court of Canada concluded that a federal/provincial egg marketing scheme did not violate the Charter even though the Northwest Territories were not allocated a quota. Respecting Section 6, the Court held (at page 196):
... s. 6 responds to a concern to ensure one of the conditions for the preservation of the basic dignity of the person. The specific guarantee described in s. 6(2)(b) and s. 6(3)(a) is mobility in the gaining of a livelihood subject to those laws which do not discriminate on the basis of residence. The mobility guarantee is defined and supported by the notion of equality of treatment, and absence of discrimination on the ground normally related to mobility in the pursuit of a livelihood.
[36] The disallowance of a deduction or credit for the payment of voluntary National Insurance contributions paid to the U.K. in no way violates the Appellant's rights pursuant to this section.
[37] I believe the Appellant's argument is that the freezing of the U.K. old age pension restricts his mobility since he feels pressured and under duress to relocate to the U.K. This however is not related in any way to a breach of his Canadian mobility rights. He is unrestricted in his mobility within this country and he is free to remain or return to the U.K. as he himself sees fit. The Appellant produced no evidence, other than correspondence of a lady who was not called as a witness, to show that he felt pressured to move back to the U.K. In fact the Appellant will eventually be the recipient of both the CPP pension and the U.K. pension. While many U.K. citizens, who have moved here without benefit of our CPP pension, are receiving only the non-uprated portion of the U.K. old age pension, that is not the case as presented before me in respect of this Appellant. The failure of the Act to include a deduction or tax credit for contributions to a foreign insurance plan in no way interferes with the Appellant's right to move within Canada, to leave or to pursue a livelihood here.
[38] The Appellant then pleads that his rights under section 7 of the Charter have been infringed. Section 7 states:
Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
[39] I will not restate them here but the three main stages of a section 7 analysis are stated by the Supreme Court of Canada in R. v. White, [1999] 2 S.C.R. 417.
[40] The Appellant referred often in his submissions to the 144,000 U.K./Canadian citizens resident in Canada that were affected by the failure of the Act to provide a deduction or a tax credit. On several occasions I reminded the Appellant, I had only his appeal before me and it was his circumstances that were the focus of the appeal. The Appellant seeks a foreign tax deduction or a foreign tax credit to reduce his tax liability in the 1999 taxation year. This is an issue of economics not deprivation of life, liberty or security of person as the Appellant alleged. Respondent counsel quoted both Schaff v. The Queen, [1993] 2 C.T.C. 2695 and Whitbread & Walley et al, (1988) 51 D.L.R.(4th) 509 as standing for the proposition that section 7 does not protect economic interests nor does it guarantee a minimum income or standard of living or include a right to carry on a business or earn a livelihood. I agree with Respondent counsel's contention that if there is any interference or restriction with the Appellant's liberty it is caused by the U.K. Government policy in regard to freezing of the old age pension.
[41] Even though I find no infringement of the Appellant's rights under this section, the Minister in any event is entitled to allow certain deductions while not allowing others. The Act by its very nature allows some taxpayers certain benefits while denying those very benefits to others.
[42] Lastly, the Appellant complains of an infringement of section 15 of the Charter which provides:
(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.
(2) Subsection (1) does not preclude any law, program or activity that has as its object the amelioration of conditions of disadvantaged individuals or grounds including those that are disadvantaged because of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
[43] One of the leading cases on the interpretation of section 15 is Law v. Canada (Minister of Employment and Immigration, [1999] 1 S.C.R. 497 (S.C.C.) which sets out the three step analysis a court must undertake.
[44] The onus or burden of proof is on the Appellant who alleges a breach of section 15 of the Charter to show or prove that the legislation is discriminatory (the case of Thibaudeau at page 5274).
[45] The Appellant's argument is based on national origin and the analogous ground that he is an immigrant. His status as an immigrant and nationality can be discussed together under the enumerated ground of "national origin". He argues that Canadian citizens paying into a Canadian state pension are treated differently than a Canadian citizen paying into a U.K. state pension.
[46] The Appellant claimed a non-refundable tax credit in his 1999 tax return for CPP contributions. All employed Canadian citizens are required to make CPP contributions and are entitled to a corresponding deduction under the Act. According to his return it appeared that the Appellant was entitled to the non-refundable tax credit in this respect. Citizens of this country whether of U.K. national origin or Canadian national origin are not entitled to a like deduction for contributions made to a foreign insurance plan. There is no differential treatment as nationality does not come into play. The Act treats all Canadian citizens on the same footing regardless of nationality. The Appellant's argument in fact if allowed would give him preferential treatment based on national origin. The Act in allowing deductions, benefits and credits must do so by making distinctions. This does not necessarily make the provisions discriminatory. There is no differential treatment here and if it could be argued that there was, it is certainly not discriminatory.
[47] In Triantis v. Canada (Minister of National Revenue - M.N.R.), [1992] T.C.J. No. 768, the Court stated in dealing with a claim that an old age security pension claw-back represented discrimination against those over 65 years of age:
It is quite clear that the impugned legislation creates a distinction between certain classes of taxpayers 65 years and older, but that distinction is based on a level of income as asserted by the Respondent. That distinction - which results in a refund of the amount by Mr. Triantis, and its possible retention by another recipient - has been accomplished by the use of the provisions of the Income Tax Act, and that does appear to be distasteful to Mr. Triantis. However nothing was brought forward at the hearing which would indicate there are any limits on the powers of Parliament to do just that - to make such a distinction and to make it under the Income Tax Act.
[48] The Minister is vested with the authority to generate revenue for Canada and the further authority to make necessary distinctions within the provisions of the legislation in accomplishing this goal.
[49] In conclusion, I find no breach of the Appellant's rights and freedoms under any of the sections 6, 7 or 15 of the Charter. Reference was also made to section 1 of the Charter. The only comment I make in light of my finding is that the Income Tax Act would be saved pursuant to section 1 even if I had found some breach. The Respondent cited the tests for the application of section 1 as found in the decision of the Supreme Court of Canada, R. v. Oakes, [1986] 1 S.C.R. 103. She reviewed each of these tests as they might apply to the present case. I do not intend to embark upon an analysis under section 1 or a review of these tests, except to state that the provisions of the Act are within the reasonable limits prescribed by law with the aim of generating revenue within the country.
[50] And finally the Appellant made reference to the Canadian Bill of Rights. I find no violation here. The policy of freezing old age pensions for U.K. citizens residing in Canada is a U.K. policy not a Canadian one. In fact according to evidence submitted by the Appellant, the Canadian government has spoken out against what appears on its face to be an unfair regime. However that may be, there is still no deprivation of the Appellant's rights under this Bill within this country.
[51] Although I sympathize with the Appellant's problems which he has encountered with his U.K. pension, I must interpret the law as I find it.
[52] Accordingly I must dismiss the appeal.
Signed at Ottawa, Canada, this 8th day of June 2001.
"Diane Campbell"
J.T.C.C.
COURT FILE NO.: 2001-72(IT)I
STYLE OF CAUSE: Frank Yates and
Her Majesty the Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: May 9, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge Diane Campbell
DATE OF ORAL JUDGMENT: May 11, 2001
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Kristy Foreman Gear
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada