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Citation: 2003TCC23 |
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Date: 20030205 |
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Docket: 2002-1805(IT)I |
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BETWEEN: |
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HUIQING H.G. GUO, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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For the Appellant: The Appellant herself
Counsel for the Respondent: Anne Jinnouchi
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REASONS FOR JUDGMENT
(Delivered orally from the Bench at Saskatoon, Saskatchewan,
on Tuesday, November 5, 2002 and revised as to style and syntax at
Ottawa, Canada on February 5, 2003)
Margeson, J.T.C.C.
[1] The matter before the Court for decision at this time is that of Huiqing H.G. Guo and Her Majesty The Queen. The sole issue before the Court is whether or not the Appellant was an ordinary resident of Canada for the period from June 1, 1999 to July 19, 2000 under the provisions of the Income Tax Act ("Act"). The evidence is quite clear in this case. There is no real dispute about the facts.
[2] If one looks at the Reply to the Notice of Appeal ("Reply"), page 4 at paragraph 12, the Appellant has admitted all of the allegations with the exception of subparagraph 12(f), which was an allegation that in February of 1999 the Appellant applied for the position of a post-doctoral research job at the University of Minnesota as an exchange visitor research scholar. She said that was not quite correct. The date could have been December 19, 1998 or January 1999 as well as February 1999, but that does not change the situation any as far as the Court is concerned.
[3] She disputed paragraph (q)(I) where the Minister of National Revenue ("Minister") alleged that she had a dwelling place in Canada where her spouse, child and mother resided. She did not agree with that. Counsel for the Respondent argued that she did. She also disagreed with paragraph (q)(V) which said that a further tie was her eligibility for provincial hospitalization and medical coverage. It was her position that she did not have provincial coverage in Canada when she was in the United States. She did not believe that if she presented her card in the United States that she would be covered.
[4] The issue was whether or not she had provincial coverage in Saskatchewan or in other parts of Canada. That is what the Court has to decide. She said that she did not. She also disagreed with paragraph (r). She said that that applied until June 1999 and not after. She agreed with the remainder of the presumptions.
[5] There was no real dispute with respect to the evidence. Counsel for the Respondent discussed the evidence in detail and made her arguments thereon. She said that the real issue was whether or not the Appellant was an ordinary resident of Canada between June 1, 1999 and June 19, 2000 under the Act. Alternatively, under the provisions of subparagraph 110(1)(f)(i) of the Act, the Appellant was subject to taxation in Canada because she was not subject to taxation in the United States. Therefore, even if she was not an ordinary resident in Canada, since she was not taxed in the United States, she was taxable in Canada.
[6] Counsel referred to the Act with respect to the meaning of "ordinary resident". Subsection 2(1) says that:
An income tax shall be paid, as required by this Act, on the taxable income for each taxation year of every person resident in Canada at any time in the year.
[7] Then we have to go to subsection 250(1) of the Act with respect to "person deemed resident" and subsection 250(3) with respect to "ordinarily resident".
[8] Counsel quite properly referred to the leading case in Canada on this issue as to whether a person is ordinarily resident in Canada or is an ordinary resident in Canada. In Thomson v. M.N.R., 2 DTC 812, at page 815, Rand J., said:
For the purpose of income tax legislation, it must be assumed that every person has at all times a residence. It is not necessary to this that he should have a home or a particular place of abode or even a shelter. He may sleep in the open. It is important only to ascertain the spatial bounds within which he spends his life or to which his ordered or customary living is related. Ordinary residence can best be appreciated by considering its antithesis, occasional or casual or deviatory residence. The latter would seem clearly to be not only temporary in time and exceptional in circumstance, but also accompanied by a sense of transitoriness and of return.
[9] Those are the considerations when one is trying to determine whether a person is an ordinary resident or they are not an ordinary resident.
[10] In paragraph 50 of the same case, the Court held:
But in the different situation of so-called "permanent residence," "temporary residence," "ordinary residence," "principal residence" and the like, the adjectives do not affect the fact that there is in all cases residence; and that quality is chiefly a matter of the degree to which a person in mind and fact settles into or maintains or centralizes his ordinary mode of living with its accessories in social relations, interests and conveniences at or in the place in question. It may be limited in time from the outset, or it may be indefinite, or so far as it is thought of, unlimited. On the lower level, the expression involving residence should be distinguished, as I think they are in ordinary speech, from the field of "stay" or "visit".
[11] Counsel also referred to the Immigration Act, particularly subsection 25(2) which reads:
- Possession by a person of a valid returning resident permit issued to that person pursuant to the regulations is, in the absence of evidence to the contrary, proof that the person did not leave or remain outside Canada with the intention of abandoning Canada as his place of permanent residence.
[12] Here, the Appellant made application for a returning resident permit and there was no evidence before the Court which would lead the Court to conclude that she abandoned it. On the basis of her own evidence it is quite clear that she did not give any indication at all that she was abandoning Canada.
[13] It could be safely concluded from her own evidence that Canada would only have been abandoned if she had been able to satisfy her preconditions of becoming a resident in the United States; that is, that herself, her husband, her daughter and her mother would be able to go to the United States. If that did not happen, the Court is completely satisfied that she would not have and did not have any intention of ever abandoning her right to return to Canada. Neither did she abandon her rights under the permanent resident permit. She never said that she was not interested in keeping it, irregardless of the fact that in her own mind she thought that she might have some difficulties getting back into Canada at some time. These fears were never realized.
[14] Counsel also referred to Qing Gang K. Li v. Canada, 94 DTC 6059, where the Court dealt with Article 19 of the Canada-China Income Tax Agreement, the avoidance of double taxation provision of the taxation agreement between Canada and China, and said:
... Here, the applicant was a visitor and as such he was entitled the benefit of Article 19 while he retained that status in Canada. However, he chose to make application to become a landed immigrant, thus evidencing an intention to remain in Canada permanently. This intention was actualized when he was granted landed immigrant status on July 13, 1990. In such circumstances, the applicant could not properly invoke Article 19 for his benefit.
[15] In Lee v. M.N.R., 90 DTC 1014, Teskey J., referred to the various factors that the Court should consider in deciding on a question of fact whether a person is an ordinary resident in a place or not. He said:
The question of residency is one of fact and depends on the specific facts of each case. The following is a list of some of the indicia relevant in determining whether an individual is resident in Canada for Canadian income tax purposes. It should be noted that no one or any group of two or three items will in themselves establish that the individual is resident in Canada. However, a number of factors considered together could establish that the individual is a resident of Canada for Canadian income tax purposes:
[16] Included in this list were many of the factors that have been referred to by counsel here today and also have been touched upon by the Appellant in her argument.
[17] Counsel further referred to other cases. She referred to the case of Ayodeji Harris-Eze v. The Queen, Docket: 2001-972(IT)I, which is a decision of this Court where many of the same issues came up, but where the factual situation was quite different from the factual situation in the present case. In that case the Court decided that Mr. Harriz-Eze was not a resident of Canada in fact. It had to consider the tie-breaking rules, it had to consider the Article IV of the Canada-U.S. Income Tax Convention (1980). There were competing residences as well. The factors which the Court found favourable to the Appellant's position in that case do not appear here. Where the factors were the same as here, this Court concludes that they speak unfavourably in respect to the Appellant's position.
[18] In that case the Court said:
At the outset the Court must make a comment about the evidence of the Appellant. In a case of this nature the evidence of the Appellant is paramount. However, it is not only the avowed intention of the Appellant which is significant but more importantly the actions of the Appellant in spite of what his avowed intention was. Even though significant, the question of intention in this matter is not determinative. The Court must weigh and consider all of the facts as well as take into account the avowed intention of the Appellant as indicated in his evidence.
[19] Here, when the Court breaks down the evidence of the Appellant and considers everything that she said it has no difficulty whatsoever in concluding at the end of the day that this Appellant made it quite clear that she always intended to come back to Canada. That was her intention. She always intended to come back and make Canada her permanent home. The only way that she was not going to come back to Canada was if she could have fulfilled the conditions precedent to her remaining in the United States; that is, if her mother, her husband and her daughter could go there and if she were able to find work there. None of these conditions had been fulfilled when she came back to Canada and consequently there was nothing to indicate that she had changed her intention, which was obviously there from the beginning, to be an ordinary resident in Canada.
[20] She was trying to take advantage of her right to come to Canada, she did not want to give up that right and she was not going to give it up until some of the United States conditions had been fulfilled. The Court is satisfied that at no time were these United States conditions ever fulfilled nor was there any indication that they ever really would be fulfilled. When the Court looks at her intention as evidenced by her evidence in Court, it is quite clear that she always intended to come back to Canada and she wanted to protect her right to do so.
[21] Counsel for the Respondent said that the Appellant maintained her primary ties with Canada. Her husband was here, her daughter was here and her mother was here. Her mother, daughter and husband were living here, they had a place of abode in Saskatchewan. Her husband was obviously a student and was studying. It may be true that she believed that she had to support him, but that does not take anything away from the fact that this was evidence of an important tie to Canada. The ties between the Appellant, her husband and her family were maintained. She was sending money to Canada from the United States, which was the money she earned in the United States. That is some indicia as to what her intention was and as to what her ordinary residence was.
[22] The dwelling was available to her and was occupied by her husband, daughter and mother and was occupied by her when she came back to Canada on July 22nd for a visit. She said that she visited them approximately every three months. She did not think that that was much of a visit, and suggested that it was more of a temporary visit and did not suggest permanency. The Court does not accept that argument. These visits that she made were much more than that. On all occasions that she came to Canada, she used the residence. She was never stopped at the border. She may have had some difficulty, but she was always admitted.
[23] Counsel referred to Exhibit R-1 in which the Appellant herself admitted in April of 2000 that she was a permanent resident of Canada and had to come back to Canada and find a job before 2001. The Court cannot overlook that. There were other factors as well. She had a vehicle registered in Saskatchewan. She tried to explain that by saying that her husband needed a vehicle and she was not just going to take it and sell it, it was not worth enough. But the fact is, it was a vehicle registered in her name, which was in Canada, which was being used by her husband and presumably could be used by her when she was in Canada. Those are the facts.
[24] She was a member of a society in Canada. She was a member of a society in the United States. One might argue that one cancels out the other because the Court understands that it was the same society, but in any event, that has to be considered. She did partake in some of the school activities as a parent with respect to her daughter in Canada. She went to a home and school meeting in Canada.
[25] She attended celebrations for the Chinese New Year in Canada. She did have some social relations in Canada. They were not extensive but they existed. When she lived in the apartment in Canada she associated with at least one of the families, and her daughter went to school with one of the children of one of the families. There was some social interchange of a personal nature there, which the Court must consider.
[26] With respect to economic ties, the Court is satisfied that she had a bank account in Canada, which she had when she was here and she continued to have it after she went to the United States. It is true that it was shared, but nonetheless it was a bank account to which she had access, and she put money into it and bills were paid out, presumably on her own behalf and certainly on behalf of her husband and daughter.
[27] She made application for the Child Tax Benefit credit. She considered that she was entitled to the Child Tax Benefit credit. Her explanation was that she had not changed the information that she had given to the Minister before she went to the United States, but her husband was now the caregiver for her child. The fact remains that she received the Child Tax Benefit credit.
[28] She also had a provincial health card. There is nothing in the evidence which would indicate to the Court that she was not entitled to use that provincial card if she came back into Canada. She obviously could not use it in the United States but there is no reason why she could not have used it in Saskatchewan if she came back and she must have retained it for that same reason.
[29] There was some evidence that she had a mailing address in Saskatchewan. It is true that she had a mailing address in the United States as well, but one address in the United States was given merely for the purpose of allowing her to receive the travel expenses, which she claimed. For income tax purposes, she did indicate on her returns, at least on one of them that her address was a Saskatchewan address. The Court cannot just overlook that, that is the way it was. She filed income tax returns in Canada using the Canadian address.
[30] When the Court compares the indicia of ordinary residence in Canada with ordinary residence in the United States, there is no real contest. When one adds up all of the factors, which indicate that she was an ordinary resident of Canada, compares them with those factors, which indicate that she was an ordinary resident in the United States, including her own evidence and her own statements, her own application that she filled out, her own income tax returns, it is quite clear that there is no contest. The contacts that she had with Canada far outnumbered not only in quantity, but also in quality those contacts with the United States.
[31] Additionally, when she was in the United States she did not pay any income tax there. She was described as a non-resident of the United States. If she was intending to remain permanently in the United States one would not have been so designated and she would have made it quite clear that she was seeking permanent employment in the United States and she was relinquishing any intention of coming back to Canada. This, obviously was not the case. All indicia were to the effect that she intended to go back to Canada and continue to be a permanent resident of Canada.
[32] The visits that she made to Canada were significant enough. They were made every three months and were not just passing visits. She went to Toronto and made visits every three months to Saskatchewan to visit her mother, her husband and her daughter.
[33] She was invited to go to Toronto by the Prairie Swine Centre, which was a place where she had worked previously in Canada. This was an indicia of the contact that continued to exist between her and the people in Saskatchewan. This was a further indication of her intention to remain a permanent resident of Canada. Her immigration status is not conclusive of what her intention was nor is it conclusive of whether a person is an ordinary resident of one country or the other, but it is of some significance in light of the evidence that she made an application for permanent resident status, that she received her returning resident's permit, that she made certain that she was going to keep it and that she did not do anything to cancel it. All these actions were indications that she intended to remain a permanent resident of Canada.
[34] Counsel also referred to subsection 25(1) of the Act regarding the presumption. That has to be considered.
[35] The Court agrees with counsel for the Respondent that at the end of the day all of these factors add up to an intention on the part of the Appellant to be a permanent resident of Canada, and that is what she was. She was not a resident of the United States. This was a conditional position on her behalf dependent upon unfulfilled conditions.
[36] Counsel said that alternatively, under subparagraph 110(1)(f)(i) of the Act she was not exempt because she was not subject to taxation in the United States. The Canada/U.S. Treaty does not apply as far as she was concerned. There was no issue of double taxation. The tie-breaker rules do not apply.
[37] The Court has listened carefully to the Appellant's arguments. The evidence was not always consistent and the Court is satisfied that where there is any conflict between her evidence and what the documents indicate, then the Court accepts that other evidence as being preferable to hers.
[38] She said that she was only authorized to work at the Prairie Swine Centre and that if she did not have that job she would not be entitled to come back to Canada and that when she went out of Canada she could not get back in during a certain period of time. Yet the evidence is quite to the contrary. She came down to Toronto and was admitted without any problems. She came to Saskatchewan. She was admitted because there was evidence in their computers that she and her husband were going to be granted landed immigrant status. Consequently, she had no difficulty being admitted.
[39] In any event, the Court is satisfied that there was no evidence before it, which would lead it to conclude that the Appellant was prohibited from coming back into Canada and that she could not return to her home. There was no evidence to indicate that that was the case at all, and indeed, every time that she tried to get in she got back in for one reason or another.
[40] Her position was that Canada did not have to take her in. The Court is not satisfied that that argument was made out on the balance of probabilities. All of the evidence that was introduced indicated that she was entitled to get in, that she always intended to be a permanent resident and that is what she was.
[41] The Appellant referred to the case of Shih v. Canada, [2000] T.C.J. No. 196 (Q.L.), particularly at paragraph 15, but that case does not help her cause. That case refers to the case of Thomson, supra, and has to do with the difference between a visit and a stay.
[42] In the case at bar the Court is satisfied that what the Appellant had in the United States was a stay. She went down to the United States with the intention of working, but at all times she intended to come back to Canada. She did not intend to work permanently in the United States. She intended to remain an ordinary resident of Canada and that is what she did.
[43] Unfortunately for the Appellant, on the basis of the evidence given and considering the credibility of the evidence that she gave, her own evidence supported the Crown's position that she was an ordinary resident of Canada in the years in question and the Court must so find.
[44] The appeal is dismissed and the Minister's assessment is confirmed.
Signed at Ottawa, Canada, this 5th day of February 2003.
"T.E. Margeson"
J.T.C.C.
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CITATION: |
2003TCC23 |
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COURT FILE NO.: |
2002-1805(IT)I |
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STYLE OF CAUSE: |
Huiqing H.G. Guo and Her Majesty The Queen |
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PLACE OF HEARING |
Saskatoon, Saskatchewan |
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DATE OF HEARING |
November 5, 2002 |
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REASONS FOR JUDGMENT BY: |
The Honourable T.E. Margeson |
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DATE OF JUDGMENT |
February 5, 2003 |
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APPEARANCES: |
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For the Appellant: |
The Appellant herself |
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Counsel for the Respondent: |
Anne Jinnouchi |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |