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Docket: 2004-1214(OAS) |
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BETWEEN: |
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CHRISTIAN BOLDUC, |
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Appellant, |
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and |
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THE MINISTER OF HUMAN RESSOURCES DEVELOPMENT,
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
_______________________________________________________________
Appeal heard on August 23, 2004, at Québec, Quebec
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Before: The Honourable Justice Alain Tardif |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Emmanuelle Faulkner |
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JUDGMENT
The appeal filed under Part II of the Old Age Security Act regarding the payment period from April to June 2003 is dismissed, in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 22nd day of September 2004.
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"Alain Tardif" |
Tardif J.
Translation certified true
on this 23rd day of December 2004.
Monica F. Chamberlain, Translator
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Citation: 2004TCC628 |
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Date: 20040922 |
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Docket: 2004-1214(OAS) |
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BETWEEN: |
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CHRISTIAN BOLDUC, |
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Appellant, |
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and |
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THE MINISTER OF HUMAN RESSOURCES DEVELOPMENT, |
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] This is an appeal regarding the Old Age Security Act(the "Act"), in particular sections 2, 10, 12, 14, 27.1 and 28. The appeal also deals with sections 3, 56 and 146.01 of the Income Tax Act.
[2] The issue is whether the Respondent correctly included in the Appellant's income $578 from a Registered Retirement Savings Plan ("RRSP") during 2003 and if the Respondent correctly determined that his income was $7,302.72 in order to calculate the Guaranteed Income Supplement provided in Part II of the Act for the payment period of April to June 2003.
[3] The Appellant acknowledged that all of the Respondent's assumptions of fact set out in the Response to the Notice of Appeal are true. The assumptions are as follows:
[translation]
(a) In 1992, the Appellant withdrew $8,672.92 from a Registered Retirement Savings Plan (RRSP) to buy a house under the Home Buyers' Plan (HBP);
(b) Under the Home Buyers' Plan, the Appellant must include in his income, every year from 1995 and for the 15 subsequent years, $578.41 as income from a RRSP, corresponding to the annual amount he would have been required to reimburse to his RRSP;
(c) In 2003, the Appellant did not make any reimbursement to his RRSP;
(d) The Appellant became eligible for the Old Age Pension and Guaranteed Income Supplement in April 2003;
(e) In July 2002, the Appellant filed an application for the Guaranteed Income Supplement provided in Part II of the Old Age Security Act for the period from July 2002 to June 2003;
(f) In this application he declared that his annual income for 2001 was $12,508.31;
(g) On January 15, 2003, the Appellant filled out a statement of estimated income form for 2003 because his annual income was expected to decrease from $12,508.31 to $7,302.72 starting in April 2003;
(h) The Appellant's estimated income for 2003 was set out as follows:
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CPP/QPP benefits ($552.06 x 9 months) ......... Interest ........................................................ RRSP income........................................ |
$6,624.72 $100.00 $578.00
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Total .......................................................... |
$7, 302.72 |
(i) Based on this information, the Respondent then estimated the Appellant's income at $7,302.72 for the 2003 tax year in calculating the Guaranteed Income Supplement.
[4] The Appellant is challenging the reasonableness of the Human Resources Development Minister's decision, although he recognizes the logic and the mechanical nature of how his file was processed. Furthermore, he clearly expressed his view and claims in the following letter of July 9, 2003:
[translation]
Human Resources Development
Income Security Programs
333 rue de la Gare-du-Palais,
Québec QC
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To whom it may concern,
I would like to draw your attention again to the income of $578.00 set out on line 120 of the application for the Guaranteed Income Supplement.
This amount represents part of a withdrawal for the Home Buyers' Plan made in 1992 without it being taxed.
At the time I had a choice between paying back the RRSP and declaring it as taxable income starting in 1995 for a 15-year period. I opted for the latter solution and thus will claim until 2010 $578.00 ($578.41) to the Revenue Department to enable it to recuperate the taxes not paid in 1992.
The ambiguity [error in the original] no doubt stems from the fact that this amount is placed on line 129 (RRSP income) of the statement of income.
It is not an amount the increases my annual income as would be the case of a withdrawal from a registered retirement savings plan. It is not real income for the current year but an amount claimed for tax purposes.
The amount of the Guaranteed Income Supplement is determined each year because the real income of an individual may vary each year. Accordingly, if someone withdrew $578.00 from a pension fund in 2003, you would obviously take that into consideration in determining the amount of the supplement since that person's income would really increase by $578.00 that year.
However, in my case, this amount does not increase my income each year because I do not receive it: I claim it for tax purposes.
Enclosed are documents from the Department of Revenue that confirm that the amount claimed truly concerns the HBP.
I therefore ask that you make the necessary adjustments.
Sincerely,
...
[5] The Appellant, who is nice and very articulate, essentially said that he felt it was unreasonable that his income calculated under the provisions of the Income Tax Act was used to apply provisions for calculating the Guaranteed Income Supplement for the period from April to June 2003 because he did not actually receive that income.
[6] He also noted that the Human Resources Development Minister (the "Minister") should have his own rules, criteria and conditions for calculating the Guaranteed Income Supplement. According to the Appellant, this would make it possible to consider the person's actual income when eligibility for the supplement is being assessed. In other words, the Appellant claimed that the purpose or objective of determining eligibility would be better served if those responsible for its application had the full power and authority needed to establish available income and were not bound by the provisions of the Income Tax Act.
[7] Although understandable, the Appellant's arguments are not valid; in fact the Minister has full competence and jurisdiction to act. The fact that one act is referred to in applying another act is neither a failing nor a fault. On the contrary, this allows for more coherence and ease of application. In fact, it is much simpler, and above all more coherent, that the same concepts have the same meanings: this allows for better comprehension and makes application simpler.
[8] Canadians are already faced with a multitude of very complex laws and, increasingly, lawyers are refusing to work as generalists and instead focusing their abilities in very specific and specialized areas. Consequently, when laws provide that some common concepts mean the same thing it is an advantage and not a failing. Often the complexity is compounded by several levels of government or authority in the same area of activity.
[9] A specific illustration of this difficulty is the issue of permanent total disability that does not really have a definition that satisfies everyone.
[10] In the case at bar, the applicable provisions are clear and do not allow for any equivocation or ambiguity. Moreover, the provisions are based on an unquestionable rationale and logic. First, the legislature allowed any physical person to amass capital commonly called an RRSP, with inarguable tax advantages, to make retirement planning easier.
[11] Second, the legislature provided that holders of RRSPs could withdraw all or part of the tax-sheltered amount to make it easier to buy property (the Home Buyers' Plan or "HBP") through a procedure that requires the withdrawal to be repaid over a 15-year period.
[12] This reimbursement obligation is sanctioned by a measure that has the same effect as if the taxpayer had not made the withdrawal; specifically, the amount that the taxpayer should have reimbursed is taxed as if that amount had been withdrawn. In other words, the taxpayer must assume a tax expense on an amount that was not received, but is presumed to have been received, because of the choice made under the HBP.
[13] Based on that, the Appellant claims that it is essentially theoretical income that should be deducted from the assumed income when calculating the supplement.
[14] The Appellant's claim is even more understandable because the basis of the provisions concerning the supplement is the difficult financial situation of the recipient affected by this act.
[15] However, supporting the Appellant's claims would have the effect of doing indirectly what he cannot do directly, that is, withdraw an amount from his RRSP under the HBP without paying tax on it.
[16] Moreover, this would have the effect of compensating those who have chosen to take advantage of the HPB in the years prior to retirement by not reimbursing the amounts that, according to the Appellant, should be excluded from the calculation of available income.
[17] The addition of theoretical income following non-repayment of the RRSP would then essentially be theoretical, since it would be deducted in the end because it is not available. As a result, it would make it easier to qualify for the Guaranteed Income Supplement program.
[18] Although we are looking at small amounts, I understand that they have considerable importance to someone who would like to qualify for the Guaranteed Income Supplement program.
[19] However, it is also essential that both the spirit and the letter of the Act are not mocked by one or more decisions that would allow someone to do indirectly what cannot be done directly.
[20] In the case at bar, the Respondent correctly included in the Appellant's income the amount of $578 as income from an RRSP for the 2003 tax year, which brought his income to $7,302.72 for calculating the Guaranteed Income Supplement.
[21] For all of these reasons the appeal must be dismissed.
Signed at Ottawa, Canada, this 22nd day of September 2004.
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"Alain Tardif" |
Tardif J.
Translation certified true
on this 23rd day of December 2004.
Monica F. Chamberlain, Translator
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CITATION: |
2004TCC628 |
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COURT FILE NUMBER: |
2004-1214(OAS) |
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STYLE OF CAUSE: |
Christian Bolduc v. The Minister of Human Resources Development |
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PLACE OF HEARING: |
Québec, Quebec |
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DATE OF HEARING: |
August 23, 2004 |
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REASONS FOR JUDGMENT BY: |
Alain Tardif J. |
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DATE OF JUDGMENT: |
September 22, 2004 |
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APPEARANCES: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Emmanuelle Faulkner |
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COUNSEL OF RECORD: |
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For the Appellant: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |