Date: 20000601
Docket: 2000-364-IT-I
BETWEEN:
DENNIS R. DOUZIECH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
(Delivered orally from the Bench at Edmonton, Alberta, on May 11, 2000)
Bowie J.T.C.C.
[1] Mr. Douziech, I am not unsympathetic to your position in this matter, because it is, I think, quite clear -- well, perhaps it is not 100 per cent clear, but it at least appears that you are not being given the benefit of an administrative practice that has been adopted and applied more or less universally by the Minister of National Revenue (the Minister) in assessing people under the Income Tax Act (the Act).
[2] As I understand the facts, you made a claim for a credit for charitable donations when filing your return for the 1998 taxation year, and the amount of that claim was $10,414.20. The claim was based not upon the donations you made during the 1998 taxation year, but upon the basis of donations made by your spouse. The donations you yourself made during the 1998 taxation year you did not claim when filing for that year, but instead, as you are entitled to do, you claimed them when filing for the 1999 taxation year.
[3] In assessing you, the Minister has disallowed your claim for the charitable donation credit, and the reason for doing so is twofold. The Minister has said that they are disallowed because these are not donations you made but they are donations made by your spouse; and I think it is fair to say, although this is a paraphrase, that the Minister has gone on to say, or at least the Minister’s position is, that had you and your spouse been married at the time he would have permitted you the credit, but since you were not married at the time, and were not in fact married until June, 1998 (the middle of the year under appeal), you were not going to be the beneficiary of this administrative practice.
[4] As I said to you at the outset this morning, I am confined to making decisions on the basis of the facts as they are demonstrated in court, and on the basis of the law as it is written by Parliament. If the law is unclear, then I have to interpret it; but when the law is clear I have no power to change it. The law relating to deductions for charitable donations is found in section 118.1 of the Act. What it says there in subsection (3) is that an individual, in computing tax payable, is entitled to deduct an amount computed in accordance with the formula that is set out in section 118.1(3), and that formula is based upon, "...the individual’s total gifts for the year". Now, there is a definition of total gifts contained in subsection (1) of section 118.1, and it is quite clear from a reading of that definition that an individual’s total gifts are the gifts made by the individual.
[5] The practice has been applied for some time by the Minister that is demonstrated by the excerpts that you have brought forward from two publications of Revenue Canada. One of them is the Income Tax and Benefit Guide for 1998, and the other one is a publication called Gifts and Income Tax. The Minister has, as a matter of administrative practice, accepted as part of an individual’s gifts, gifts made by the spouse of that individual, but there is no authority in law for doing so. You have referred me to two publications of CCH, a well-known legal publisher, and those publications are authored by people who have a good deal of experience in the field, and they refer to this practice. The one titled Income Tax Returns, written by R.D. Hogg, C.A. and M.G. Mallin, M.A., says donation receipts made out to your spouse will normally, as a result of administrative practice, be accepted if claimed in your return. That is, as I understand it, an accurate statement that they will normally, as a result of administrative practice, be accepted. There is no legal authority for doing so, and I do not have the power to change the law. That is an issue which has been well settled in the courts for half a century or more. The definitive decision is that of the Supreme Court of Canada in M.N.R. v. Inland Industries Limited,[1] written by Mr. Justice Pigeon, referred to by Mr. Justice Cattanach in his decision in Stickel v. M.N.R.[2] Inland Industries is a 1972 decision, and the Supreme Court of Canada makes it quite clear there that whatever the Minister or his officers or employees may say is their interpretation of the law, does not change what the law is. It may well have some influence in interpreting the law, if the law is ambiguous. The Supreme Court of Canada found that to be so in a case called Harel v. The Deputy Minister of Revenue of the Province of Quebec,[3] and reaffirmed it again in a case called Nowegijick v. The Queen et al.[4] But where there is no ambiguity in the law, and I am afraid I can find none in section 118.1, I am bound to apply the law as Parliament wrote it, and I have no alternative but to dismiss your appeal.
[6] Given that there is a universally applied administrative practice, which seems not to have been applied to you, there may be some recourse that the Minister could have in your case. Now, I do not know from the facts that were introduced before the Court today whether or not you and the person who subsequently became your wife in the middle of 1998 were common-law spouses at the time she made the donations that you seek to deduct; if you were, then it seems to me that there is a considerable unfairness in refusing you the benefit of those deductions, and it may very well be that the Minister would be prepared to take action to try and obtain some relief for you by way of a remission of the amount of tax that is involved. I do not have the power to do so. As I said, I am bound to apply the law, not administrative practices, and not my view of what would be fair or unfair. The Minister, however, does have power under the Financial Administration Act to recommend a remission to the Governor-in-Council, and you may wish to take up with your Member of Parliament or with the Minister directly, the question of whether or not you have been treated fairly here, and if in fact you have not been treated fairly, whether a remission order ought to be sought for your benefit. But my hands are tied by the law as written by Parliament, in the absence of an ambiguity, and I therefore have no alternative but to dismiss the appeal.
Signed at Ottawa, Canada, this 1st day of June, 2000.
"E.A. Bowie"
J.T.C.C.