Date: 20020515
Docket: 2001-3671-IT-I
BETWEEN:
STELLA McBRIDE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
(delivered orally from the Bench at Calgary, Alberta on May 15, 2002)
Beaubier, J.T.C.C.
[1] This appeal pursuant to the Informal Procedure was heard at Calgary, Alberta on May 13 and 15, 2002. The Appellant testified and called William Cormylo to testify.
[2] The matters in appeal and the facts in evidence respecting it are set out in paragraphs 3 to 9 inclusive of the Reply to the Notice of Appeal. They read:
3. He admits:
(a) that effective March 23, 2000, legislation was enacted in Alberta to provide for a special one-time payment by the Workers' Compensation Board of Alberta to remarried widows and widowers whose spouses died from pre-1982 work related causes; and
(b) that since the Appellant's spouse died in 1957 as a result of a work related accident, the Appellant qualified to receive this one-time payment
as stated in the second unnumbered paragraph of the letter dated April 23, 2001.
4. In computing income for the 2000 taxation year, the Appellant reported total income in the amount of $95,378.00, as follows:
|
Old Age Security Pension |
$5,079.00 |
|
Canada Pension Plan Benefits |
5,979.00 |
|
Interest |
1,342.00 |
|
Taxable Capital Gains |
83.00 |
|
Other Income |
5.00 |
|
Workers' Compensation |
80,000.00 |
|
Social Assistance |
790.00 |
|
Net Federal Supplements Paid |
2,100.00 |
|
Total Income |
$95,378.00 |
5. In assessing the Appellant for the 2000 taxation year on April 26, 2001, the Minister of National Revenue (the "Minister") assessed, inter alia, tax on Old Age Security Benefits in the amount of $6,213.00 pursuant to section 180.2 of the Income Tax Act, calculated as follows:
Lessor of:
|
A |
Old Age Security Pension Paid |
$5,079.00 |
|
|
Net Federal Supplements Paid |
2,100.00 |
|
|
Total Old Age Security Benefits Paid |
$7,179.00 |
|
|
Less: Old Age Security Pension Paid Back in 2000 |
0.00 |
|
|
A = |
$7,179.00 |
|
or |
|
|
|
B |
Net Income of Appellant Before Adjustments |
$95,378.00 |
|
|
Subtract: Base Amount |
53,960.00 |
|
|
Net Income After Adjustments |
$41,418.00 |
|
|
|
x 15% |
|
|
B = |
$6,213.00 |
|
|
|
|
|
|
Tax Assessed Equals the Lessor of A or B = |
$6,213.00 |
6. On April 30, 2001, the Appellant served on the Minister a Notice of Objection to the assessment dated April 26, 2001 for the 2000 taxation year.
7. In response to the Notice of Objection, the Minister confirmed the assessment dated April 26, 2001 for the 2000 taxation year by Notification of Confirmation dated July 6, 2001.
8. In so assessing the Appellant, the Minister made the following assumptions of fact:
(a) the facts admitted and stated above, some of which are repeated here for ease of reference;
(b) on or about March 23, 2000, the Province of Alberta passed legislation under the Special Payment Act (Alberta) to provide for a special one-time payment under the Workers' Compensation Act (Alberta) to remarried widows and widowers whose spouses died from pre-1982 work related causes;
(c) the Appellant received a one-time lump sum payment from the Workers' Compensation Board of Alberta under the Workers' Compensation Act (Alberta) in the amount of $80,000.00 in the 2000 taxation year;
(d) the payment to the Appellant from the Workers' Compensation Board of Alberta was made as compensation in respect of the death of the Appellant's spouse in 1957 as a result of a work related accident;
(e) the Appellant received total income in the amount of $95,378.00 in the 2000 taxation year as stated in paragraph 4 above;
(f) the net income of the Appellant for the 2000 taxation year before deducting any amount pursuant to paragraph 60(w) of the Income Tax Act was $95,378.00;
(g) the Old Age Security pension in the amount of $5,079.00 and the net federal supplement in the amount of $2,100.00 that were received by the Appellant in the 2000 taxation year as stated in paragraph 4 above were received pursuant to the Old Age Security Act.
B. ISSUES TO BE DECIDED
9. The issues to be decided are:
(a) whether the Appellant is liable to pay tax on Old Age Security Benefits in the amount of $6,213.00 for the 2000 taxation year; and
(b) whether the assessment of the tax on Old Age Security Benefits in the amount of $6,213.00 has resulted in any type of discrimination to the Appellant.
[3] The Appellant and Mr. Cormylo agreed that the question before the Court is not one of discrimination based on the Charter. Rather it is an income question based on a one-time payment.
[4] The payment of $80,000 by the Alberta Workers' Compensation is a "special payment" authorized by Chapter S-17 of the Statutes of Alberta, 2000. It is, nonetheless a payment by Workers' Compensation out of its funds. It triggered the "clawback" in question of the Appellant's Old Age Security.
[5] That payment constituted a "pension" "benefit" or "compensation" pursuant to subsection 56(1)(a) and (v) of the Income Tax Act. It is explicitly described in both subparagraphs. (See also Lamarre Proulx, J.'s reasoning in Poulin v. Canada, 1998 T.C.J. No. 36, the reasoning of which is adopted respecting this appeal.)
[6] For this reason, the appeal is dismissed.
Signed at Saskatoon, Saskatchewan, this 3rd day of July, 2002.
"D. W. Beaubier"
J.T.C.C.
COURT FILE NO.: 2001-3671(IT)I
STYLE OF CAUSE: Stella McBride v. Her Majesty the Queen
PLACE OF HEARING: Calgary, Alberta
DATE OF HEARING: May 13 and 15, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge D. W. Beaubier
DATE OF REASONS: May 27, 2002
APPEARANCES:
For the Appellant: The Appellant herself
Counsel for the Respondent: Mark Heseltine
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada