Date: 19990226
Docket: 92-662-IT-G
BETWEEN:
KENNETH L. AUSTIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for judgment
Bowman, J.T.C.C.
[1] This appeal is from an assessment for the 1989 taxation year whereby the appellant was denied a deduction under paragraph 8(1)(c) of the Income Tax Act relating to a clergyman's residence.
Introduction:
This case was the first of a series of cases that were heard during the spring, summer and fall of 1998. They all deal with one or another aspect of paragraph 8(1)(c) of the Income Tax Act, which, broadly speaking, grants a deduction in computing income in respect of the residence of members of the clergy, ministers and members of religious orders.
[2] In all there were originally about 70 cases although over the course of the year a number of appellants withdrew their appeals. Counsel arranged the cases in groups according to the particular aspect of paragraph 8(1)(c) under which the individual was making his or her claim. The evidence of experts was called by the appellants and the respondent and it was agreed that this evidence would apply to all cases. Moreover, I informed counsel that I would not render judgment in any of the cases until they had all been heard, in an attempt to achieve as great a degree of consistency as possible, and to avoid repetition. Although I am issuing separate reasons for each group of cases, it will be apparent that they cannot be read in isolation, and authorities, arguments and reasoning in one set of reasons will have been taken into account in others.
[3] Paragraph 8(1)(c) permits a deduction in computing income from an office or employment such of the following amounts as are wholly applicable to that source or such part thereof is may reasonably be regarded as applicable thereto:
(c) where the taxpayer is a member of the clergy or of a religious order or a regular minister of a religious denomination, and is in charge of, or ministering to a diocese, parish or congregation, or engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination, an amount equal to
(i) the value of the residence or other living accommodation occupied by him in the course of or by virtue of his office or employment as such a member or minister so in charge of or ministering to a diocese, parish or congregation, or so engaged in such administrative service, to the extent that such value is included in computing his income for the year by virtue of section 6, or
(ii) rent paid by him for a residence or other living accommodation rented and occupied by him, or the fair rental value of a residence or other living accommodation owned and occupied by him, during the year but not, in either case, exceeding his remuneration from his office or employment as described in subparagraph (i).
[4] The French version reads as follows:
c) lorsque le contribuable est membre du clergé ou d’un ordre religieux ou ministre régulier d’une confession religieuse, et qu’il dessert un diocèse, une paroisse ou a la charge d’une congrégation, ou s’occupe exclusivement et à plein temps du service administratif, du fait de sa nomination par un ordre religieux ou une confession religieuse, un montant égal
(i) à la valeur de la résidence ou autre logement qu’il a occupé en vertu ou au cours de l’exercice de sa charge ou de son emploi, à titre de membre ou ministre qui ainsi dessert un diocèse, une paroisse ou a la charge d’une congrégation, ou est ainsi occupé à un service administratif, dans la mesure où cette valeur est incluse dans le calcul de son revenu pour l’année en vertu de l’article 6, ou
(ii) au loyer qu’il a payé pour une résidence ou autre logement qu’il a loué et occupé ou à la juste valeur locative d’une résidence ou autre logement lui appartenant et occupé par lui durant l’année, sans dépasser, dans aucun de ces deux cas, la rémunération provenant de sa charge ou de son emploi ainsi qu’il est indiqué au sous-alinéa (i);
[5] The amount of the deductions is not in issue. The sole question is whether the appellants meet the criteria of paragraph (c) of subsection 8(1). In none of the cases was any assumption made with respect to the opening words of subsection 8(1) and no evidence or argument relating to those words was presented. Therefore the appellants had no onus to meet concerning any question of fact arising from those words.
[6] It will be apparent from reading the provision, and from the many decided cases, as well as the Department’s own administrative practices, that a twofold test is involved:
(a) a status test; and
(b) a function test.
[7] To qualify for the deduction the taxpayer must, in order to meet the status test, be:
(a) a member of the clergy; or
(b) a member of a religious order; or
(c) a regular minister of a religious denomination.
[8] To meet the function test he or she must, in addition, be;
(d) in charge of or ministering to a diocese, parish or congregation; or
(e) engaged exclusively in full time administrative service by appointment of a religious order or religious denomination.
[9] The appellant is a credentialed minister of The Pentecostal Assemblies of Canada (“PAOC”) and was employed on a full-time basis as a minister of music at Calvary Temple in Winnipeg. Calvary Temple is a large Pentecostal church in Winnipeg, with a congregation of about 2,400.
[10] The issues are:
(a) whether he was a “regular minister of a religious denomination”; and
(b) whether he was “ministering to a congregation”.
[11] It was not contended that he was a member of the clergy and I refrain from making any comment in this case on the meaning of the word “clergy”. The question will arise in other cases and one issue that will have to be considered is whether to be a member of the clergy the ceremony whereby the person is set apart spiritually, or invested with the trappings of spiritual superiority, must be called "ordination" by the particular denomination.
[12] By-Law #10 of General Constitution, By-Laws and Essential Resolutions of the PAOC sets out the following categories of credentials at page 35:
BY-LAW #10 MINISTERIAL CREDENTIALS
SECTION 1 GRADES
There shall be the following categories of credentials:
ORDAINED
MINISTERIAL LICENSE FOR WOMEN
(ISSUED PRIOR TO 1985)
LICENSED MINISTER
DEACONESS
RECOGNITION OF MINISTRY
LAY PREACHER
[13] The appellant held a Recognition of Ministry Certificate.
[14] Paragraph (c) of subsection 4 of section 2 of By-Law # 10 reads at page 37:
(c) Provision shall be made for specialized ministries such as music, Christian education, and visitation. The candidate must be a graduate of a recognized Bible college or seminary program which meets the National Bible College Committee standard, have special training and ability in his particular field and a divine calling in order to receive a minister’s license. After three years of proven ministry while holding a minister’s license, he may apply to his district executive for ordination.
The district executive committee shall recommend such application to the General Executive for approval, and if granted, the district conference may ordain him.
[15] The requirements of a Recognition of Ministry Certificate are set out in section 2 of that By-Law:
(e) RECOGNITION OF MINISTRY CERTIFICATE:
A Recognition of Ministry Certificate may be granted to those who are engaged in some form of specific public ministry and to students enrolled in Bible college or the Canadian Pentecostal Correspondence College, who are engaged in regular preaching ministry prior to graduation. This credential may also be granted to those who are active partners with their spouses in the ministry, such certificate to be reviewed annually.
It may also be granted to a native applicant of proven character, having indication of leadership qualities and the call of God, who is active in the ministry, and who has not completed the prescribed two-year native training program.
[16] In addition, paragraph (a) of section 3 provides:
(a) All applicants for credentials shall have a personal experience of salvation, and shall have received the baptism in the Holy Spirit according to Acts 2:4, and shall subscribe to the Statement of Fundamental and Essential Truths of The Pentecostal Assemblies of Canada.
[17] Section 7 deals with discipline and sets forth a large number of grounds upon which ministers can be disciplined or, in extreme cases, can have their credentials withdrawn.
[18] Section 10 of By-Law #10 sets out the various ceremonies, ordinances and sacraments that can be performed by ministers holding credentials. That section reads:
SECTION 10 CEREMONIES, ORDINANCES, AND SACRAMENTS
Ministers holding credentials with The Pentecostal Assemblies of Canada are permitted to conduct the various ceremonies, ordinances, and sacraments in accordance with the direction of The Pentecostal Assemblies of Canada and the laws of their province.
(a) Ordained ministers are permitted to solemnise marriages if they are registered with the government.
EXCEPTIONS: Those who hold Ministerial License for Women, Licensed Minister’s Certificate, or Recognition of Ministry Certificate may, under special circumstances, be granted the right to solemnise marriage according to the Provincial Marriage Act.
(1) They must obtain authorisation from the district executive.
(2) They must be in charge of a congregation.
(3) They must be registered with the appropriate provincial or territorial government.
(b) Dedication of children, water baptism, and the communion service: These services may be conducted by the credential holder according to the custom and practices of The Pentecostal Assemblies of Canada, and in accordance with the laws of the province.
(c) Burial of the dead: One need not be an ordained minister to conduct a funeral and committal service in most provinces.
[19] It appears that a credentialed minister may perform any ceremony that an ordained minister can, except marriages, and that restriction is a matter of provincial law rather than a rule of the Church.
[20] The issuance of credentials is a matter for the National Credentials Committee. Section 4 of By-Law #10 reads in part as follows at page 39:
SECTION 4 ISSUING OF CREDENTIALS
(a) The National Credentials Committee, composed of the General Superintendent and the General Secretary, shall issue the approved credentials.
(b) All initial applications for credentials must be made on a completed application form, to be submitted to the district conference credentials committee for district conference approval.
(c) 1. The National Credentials Committee shall issue credentials to only those recommended and approved by the district executive and district conference, and who have complied with General Conference requirements.
2. Missionaries in active ministry in foreign lands shall be issued credentials by the National Credentials Committee on the recommendation of the Overseas Missions Committee.
[21] Section 13 of By-Law #23 reads at page 71:
SECTION 13 CREDENTIALS
(a) All candidates for credentials shall complete the official application form and forward the same to the district office not less than one month prior to the district conference. They shall submit for reference the names of two ordained ministers. They shall appear in person before the Credentials Committee and shall be prepared to be examined as to their doctrine, ability and conduct.
(b) The granting of credentials recommended by the Credentials Committee shall be subject to the approval of the district conference.
(c) The time and place of ordination ceremonies and the officiating ministers shall be decided by the district executive committee, consideration being given to the wishes of the candidate.
[22] As explained by Reverend Bruce Martin, senior pastor of Calvary Temple in Winnipeg, the credentialing of ministers is a careful and painstaking procedure, involving an initial application by the applicant, meetings and interviews at the local, district and national level.
[23] The applicant is at present a professor of music. He was a full-time minister of music at Calvary Temple from 1987 to 1991.
[24] He graduated with a Bachelor of Music degree from Hope College, a Christian liberal arts college in Holland, Michigan where he studied both music and theology. He subsequently received a degree of Master of Music from Yale University.
[25] When the appellant became minister of music at Calvary Temple, he occupied an office in the church and shared a secretary. He was described in the church bulletin as Pastor Ken Austin, Minister of Music. He was employed full-time by the church and spent between 54 and 60 hours per week at the church. He was in charge of seven choirs, an orchestra, a brass ensemble and a string ensemble. In the three services on Sunday, he conducted the choir, sometimes read scripture from the pulpit and led the congregation in singing. He sat immediately to the right of the pastor.
[26] It is important to note the significance of music in the Pentecostal Church. Fifty percent of every service is to be music, either congregational singing or anthems by the choir or instrumental music. The use of music as a form of worship is of ancient origin (see, for example, I Chronicles Chapter 16, verses 4-9, 42; I Chronicles Chapter 25, verses 1, 3 and 6; II Chronicles Chapter 29, verses 25 to 28; Colossians Chapter 3, verse 16).
[27] Quite apart from the appellant’s own testimony concerning the role of music in the Pentecostal church, as well as the numerous Biblical references in both the Old and the New Testaments, the Dictionary of Pentecostal and Charismatic Movements (Burgess & McGee) devotes seven pages to Pentecostal and Charismatic Music. Two short passages are illustrative:
PENTECOSTAL AND CHARISMATIC MUSIC. The Pentecostal movement has long been distinguished for the important role it gives to music in all aspects of the lives of its adherents. Fervent, spiritual singing is and has been typical of the Pentecostal-charismatic tradition of worship. The value of music for the worship, evangelism, education, and nurture of the church has emerged as a major emphasis of the movement. Music occupies a vital place in the religious experience of typical Pentecostal-charismatic believers, expressing a wide range of economic, political, and social values; styles of worship; and musical tastes.
...
II. The Tradition Develops
The prominence of music in the Pentecostal-charismatic movement can be gauged by the time devoted to singing and instrumental music in worship. It is not unusual for up to two-thirds of worship services to be given over to music performance. Moreover, music is used in the sanctuary and in the home with equal fervour.
[28] Given the prominence of music in the Pentecostal service and, generally, in the method of worship by members of that denomination, it will be evident that the role of Minister of Music assumes an importance in that church that goes far beyond that of organist or choir master of other churches. In determining whether someone is a “regular minister” in a church one must look to the structure and practices of the particular denomination.
[29] In addition to his duties in connection with the extensive music program of the Calvary Temple, he was active visiting people in hospitals or attending funerals and weddings. He delivered sermons to different parts of the congregation, such as youth, senior and an East Indian congregation. Also, he was involved in counselling members of the congregation.
[30] The respondent’s position is that the appellant was not a “regular minister” because:
(a) he was not ordained, even though the PAOC By-Laws provides for ordination;
(b) his ministry was a specialized one.
[31] Moreover, it was contended that he was not ministering to a congregation because of the specialized nature of his duties.
[32] Was Pastor Austin a regular minister of a religious denomination? If he was a minister of the Pentecostal Church, he was unquestionably a regular minister in that he attended regularly and on a full time basis to his duties in the Church. He was an integral and predictable part for five years of the life of the Church.
[33] Was he a minister? In my view he was. I do not think that ordination is a requirement of being a minister whatever role it may play in the meaning of the word “clergy”, a matter I discuss at greater length in the Kraft, Baker et al. case. Rip J. in Hardy v. Canada, [1997] T.C.J. No. 1191, discussed at some length the jurisprudence relating to the words “regular minister”. His comments are most instructive. At paragraph 8:
[para 8] I agree with respondent’s counsel that a regular minister need not necessarily be one who is ordained to qualify for the cleric’s residence deduction.
[34] After referring to both English and French dictionary definitions he said at paragraph 15:
[para 15] In both languages, then, the word “regular”, in common usage, is understood commonly to describe a consistent observance of duties or actions. English common usage has the additional meaning of a person devoted to a particular occupation or properly trained in such regard. The word “regular” may also mean “usual; normal; customary”.
[35] Rip J. quoted at some length from Greenlees v. A.G. Canada, [1945] O.R. 411, aff’d [1946] O.R. 90, leave to appeal refused [1946] S.C.R. 462. At trial, Hogg J. referred to a decision of the High Court of Justiciary of Scotland in Saltmarsh v. Adair, [1942] J.C. 58. After quoting from the analysis by Hogg J. and the judgments of The Lord Justice-General (Normand) and Lord Moncrieff in the Saltmarsh case, Rip J. observed at paragraph 21:
[para 21] Thus, Lord Justice-General Normand and Lord Moncrieff appear to infer that a “regular minister” is one who
i) performs spiritual duties, the conduct of religious services, the administration of sacraments and the like;
ii) is appointed by a body or person with the legitimate authority to appoint or ordain ministers on behalf of the denomination; and
iii) is in a position or appointment of some permanence.
In the absence of a legitimate appointment, the mere performance of the duties of a minister will not suffice, in their view, to constitute a “regular minister”.
[36] I am satisfied that the appellant here was a “regular minister” of the Pentecostal Church. He meets all of the criteria set out by Rip J. His appointment was made in accordance with formal procedures and was permanent so long as he remained in the function.
[37] Was he ministering to a congregation? He was capable of performing virtually everything the Senior Pastor did, and in fact did perform many of those functions. However, his principal activity was dealing with the all-important musical aspect of the Church. It was in this way that he served God and ministered to the spiritual needs of his congregation. The way in which one ministers to the needs of a congregation depends upon the denomination in which one operates. In the Pentecostal Church a person who provides the musical aspect of the service is indeed ministering to the congregation’s spiritual needs in as significant a way as a minister who preaches sermons.
[38] The appeal is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment to allow to the appellant the deduction under paragraph 8(1)(c).
[39] I shall defer dealing with costs in all of these cases until I have received representations from counsel for all parties.
Signed at Ottawa, Canada, this 26th day of February 1999.
“D.G.H. Bowman”
J.T.C.C.