Mercier v. MNR, 92 DTC 1693, [1992] 1 CTC 2506 (TCC)

Lamarre Proulx, T.C.C.J.:—The appellant is appealing the assessment of the respondent, the Minister of National Revenue (the''Minister") for 1988.

The question in issue concerns the constitutionality of paragraph 118(1)(b) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act"), and more particularly one of the conditions under which it applies. Paragraph 118(1) (b) of the Act provides for a tax credit in respect of an unmarried individual or a married individual who neither supports nor lives with his spouse and is not supported by his spouse, and who maintains a self- contained domestic establishment (in which the individual lives) and actually supports therein a person related to him. Such person must not be 18 years of age or older, except in the case of a parent or grandparent or where the person is dependent by reason of mental or physical infirmity. It is this age condition, which was added in 1988, that is questioned by the appellant on the ground that it is contrary to section 15 of the Canadian Charter of Rights and Freedoms (the "Charter").

Subsection 118(1)(b) of the Act reads as follows:

(1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount determined by the formula

A x B

where

A is the appropriate percentage for the year, and

B is the aggregate of

(b) in the case of an individual not entitled to a deduction by reason of paragraph (a) who, at any time in the year,

(i) is an unmarried person or a married person who neither supported nor

lived with his spouse and is not supported by his spouse, and

(ii) whether by himself or jointly with one or more other persons, maintains a self-contained domestic establishment (in which the individual lives) and actually supports therein a person who, at that time, is

(A) except in the case of a child of the individual, resident in Canada,

(B) wholly dependent for support on the individual, or the individual

and such other person or persons, as the case may be,

(C) related to the individual, and

(D) except in the case of a parent or grandparent of the individual, either under 18 years of age or so dependent by reason of mental or physical infirmity,

an amount equal to the aggregate of

(iii) $6,000, and

(iv) an amount determined by the formula

$5,000 — (D — $500)

where

D is the greater of $500 and the income for the year of the dependent person;

[Emphasis added]

Subsection (1) of section 15 and section 1 of the Charter read as follows:

15(1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

1. The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

The facts

The facts are not disputed. The appellant maintains by herself a self- contained domestic establishment where she lives with her son. She wholly supports her son, who was 24 years of age in 1988 and suffered from no mental or physical infirmity. At the beginning of 1988 he worked as a guard in the Duberger city hall. He stopped working in the middle of the summer because there apparently was a summer closure. In the fall, when he went to offer his services, there was someone else occupying the position. His income for 1988 was composed of income from employment of $561 and interest income of $134.21. The respondent admits that the son was wholly dependent on the appellant.

The appellant's position

The agent for the appellant drew the Court's attention to the fact that the requirement that the child be under 18 years of age was added in 1988, to a provision which had been in existence for a long time. The agent for the appellant argues that this is a credit for a related person, who is wholly dependent, and that the only criterion which should count is whether that related person is wholly dependent or not. Moreover, this is historically the only criterion that the legislator had retained. The age condition would therefore be contrary to section 15 of the Charter, since the age criterion is not relevant in the circumstances of paragraph 118(1) (b) of the Act, and amounts to discrimination.

The respondent's position

The respondent admits that, were it not for this requirement as to the son's age, the appellant would have been entitled to the tax credit. However, the respondent argues that this requirement is not contrary to section 15 of the Charter, because it is a classification that is not discriminatory. But if it were the case, it is justified under section 1 of the Charter because its objective is sufficiently important to justify the infringement of a right guaranteed by the Charter.

Counsel for the respondent notes that the argument that the Act has to be read as it has always been read is not valid because there are no vested rights to a tax deduction.

She argues that paragraph 118(1)(b) of the Act must be read together with paragraph 118(1)(d) of the Act, which is the credit for dependent persons. The latter of these paragraphs was also amended in 1988. The conditions became the same, which was not the case previously, and [Translation] "this uniformiza- tion is important in the overall perception of the Act and of what was intended by the legislator" [1]

I quote some of her comments with regard to sections 15 and 1 of the Charter:

Is it an insular and disadvantaged group?

. . . in this case, there is no evidence per se of disadvantage or of social, political or other prejudice against persons on whom adults are ultimately dependent, adult children who are not the mother, the father, the grandfather or grandmother and adults who are normally capable of entering the labour market. All that, as opposed, we must still see them as opposed to persons on whom minor or infirm children are dependent. [2]

Is there a justification under section 1 of the Charter?

The objective of the classification:

. . . in this case it was designed primarily to protect infirm persons and underage children, at least people on whom infirm persons are dependent, whatever their age, or underage children or parents or grandparents, which and it was not designed to protect people, other people who are themselves supposed to look after themselves, either to continue their studies, in which case there are other kinds of credits which exist for those people, or who are capable of entering the labour market, and where there are other statutes, other social systems which exist to help these people. [3]

And we must take into account the legislative system which it was intended to establish, and this is really, this is again not a special statute which is in question here. Thus the means of a tax credit for people who have minor or handicapped dependants infringed as little as possible the rights of people who have adult dependants who are not infirm not to be subject to discrimination because, moreover, since the credit is also given to the father, mother, grandfather, grandmother, thus it infringed as little as possible on adults who might still be dependent, and again, if the adult dependant was still in school, there were other means provided by the legislator for these people.

Thus the prejudicial effects of the credit, if such prejudicial effects there are, because it is not available to 24 years of age dependants who are not handicapped, that does not supplant the intended objective which is that the public at large should not have to bear, through higher taxes, the cost, the burden of those who are not working when they are capable of working, ultimately that is what is behind the reform, and so which is also primarily to lighten the tax burden of those who have dependent minor children or handicapped persons.

Thus we conclude that if there was discrimination, it is a justified limit under section 1. [4]

Counsel for the respondent referred to the following case law:

Douglas College v. Douglas/Kwantlen Faculty Assn., [1990] 3 S.C.R. 570, 77 D.L.R. (4th) 94; The Queen v. David Edwin Oakes, [1986] 1 S.C.R. 103, 26 D.L.R.

(4th) 200; The Attorney General of Quebec v. Irwin Toys Ltd., [1989] 1 S.C.R. 927, 58 D.L.R. (4th) 577; M.N.R. v. Inland Industries Ltd., [1974] S.C.R. 514, 23 D.L.R. (3rd) 677; Cuddy Chicks Ltd. v. Ontario Labour Relations Board; The Queen v. Edwards Books, [1986] 2 S.C.R. 713, 29 D.L.R. (4th) 127; Keyes v. M.N.R., [1989] 1 C.T.C. 2157, 89 D.T.C. 91; Smith v. M.N.R., [1989] 2 C.T.C. 2069, 89 D.T.C. 639; France Julien v. M.N.R., [1991] 1 C.T.C. 2391, 91 D.T.C. 586; Tiberio et al v. M.N.R., [1990] 2 C.T.C. 2345, 91 D.T.C. 17; Prior v. The Queen, [1989] 2 C.T.C. 280, 89 D.T.C. 5503; Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143, 56 D.L.R. (4th) 1; The Queen v. Turpin, [1989] 1 S.C.R. 1296; A. Gerol v. The Attorney General of Canada, [1986] 1 C.T.C. 75, 85 D.T.C. 5561; Smith, Kline & French Laboratories Ltd. v. Canada, [1987] 2 F.C. 359, 34 D.L.R. (4th) 584; Ontario Public Service Employees Union v. The National Citizens Coalition Inc., [1987] 2 C.T.C. 59, 87 D.T.C. 5270; Weronski v. M.N.R., [1991] 2 C.T.C. 2431, 91 D.T.C. 1105; The Queen v. Elizabeth C. Symes, [1991] 2 C.T.C. 1, 91 D.T.C. 5397.

Analysis

This appeal arises from an amendment to the Act in 1988 in relation to the deduction known as the equivalent to married exemption. Before 1988, the appellant was entitled to deduct this equivalent in computing her taxable income, because the age of the dependant was not a criterion for eligibility. In 1988, this deduction became a tax credit and age became an eligibility factor.

Paragraph 118(1)(b) of the Act reproduces former paragraph 109(1) (b) of the Act, except in respect of the addition of the condition that a related person who is not a parent or grandparent or is not infirm must be under 18 years of age and except for the fact that the deduction in computing taxable income became a tax credit.

Former paragraph 109(1)(b) of the Act read as follows:

in the case of an individual not entitled to a deduction under paragraph (a) who, during the year,

(i) was an unmarried person or a married person who neither supported nor lived with his spouse and was not supported by his spouse, and

(ii) whether by himself or jointly with one or more other persons, maintained a self-contained domestic establishment (in which the individual lived) and actually supported therein a person who, during the year, was

(A) except in the case of a child of the individual, resident in Canada,

(B) wholly dependent for support on the taxpayer, or the taxpayer and such person or persons, as the case may be, and

(C) connected, by blood relationship, marriage or adoption, with the taxpayer, or the taxpayer and such other person or persons, as the case may be,

an amount equal to the aggregate of

(iii) $1,600, and

(iv) $1,400 less the amount, if any, by which the income for the year of the dependent person exceeds $200;

Paragraph 109(1)(b) exists since 1972. It was amended only in respect of the amounts of the deductions. In 1972, that paragraph read as follows:

(b) in the case of an individual not entitled to a deduction under paragraph (a) who, during the year,

(i) was an unmarried person or a married person who did not support or live with his spouse and was not supported by his spouse, and

(ii) whether by himself or jointly with one or more other persons, maintained a self-contained domestic establishment (in which the individual lived) and actually supported therein a person who, during the year, was

(A) wholly dependent for support upon, and

(B) connected, by blood relationship, marriage or adoption, with the taxpayer, or the taxpayer and such one or more other persons, as the case may

an amount equal to the aggregate of

(iii) $1,500, and

(iv) $1,350 less the amount, if any, by which the income for the year of the dependent person exceeds $250;

Finally, if we go back still further in time, this right to a deduction for a person who maintains a self-contained domestic establishment has existed since 1933. That provision read as follows:

(c) Two thousand dollars in the case of

(i) A married person;

(ii) A widow or widower with a son or daughter under twenty-one years of age who is dependent upon such parent for support, or if twenty-one years of age or over is likewise dependent on account of mental or physical infirmity;

(iii) An individual who maintains a self-contained domestic establishment and who actually supports therein one or more individuals connected with him by blood relationship, marriage or adoption;

Discrimination under section 15 of the Charter

Age is one of the heads of discrimination enumerated in subsection 15(1) of the Charter. [5] However, not every statute which contains differences in protection and benefits based on age is necessarily discriminatory. For a court to be able to find that there is an infringement of section 15, it must first find that the difference in treatment is discrimination.

With respect to the analysis of section 15 of the Charter, we should recall the comments of McIntyre J. of the Supreme Court of Canada in Andrews:

In other words, the admittedly unattainable ideal should be that a law expressed to bind all should not because of irrelevant personal differences have a more burdensome or less beneficial impact on one than another [6] .

It is not every distinction or differentiation in treatment at law which will transgress the equality guarantees of s. 15 of the Charter. It is, of course, obvious that legislatures may—and to govern effectively—must treat different individuals and groups in different ways. Indeed, such distinctions are one of the main preoccupations of legislatures. The classifying of individuals and groups, the making of different provisions respecting such groups, the application of different rules, regulations, requirements and qualifications to different persons is necessary for the governance of modern society. As noted above, for the accommodation of differences, which is the essence of true equality, it will frequently be necessary to make distinctions. What kinds of distinctions will be acceptable under subsection 15(1) and what kinds will violate its provisions? [7]

It now seems to be well established that the equality guarantees of section 15 of the Charter are not violated simply because an Act contains classifications. How may we determine whether a classification is contrary to section 15 of the Charter? Certain principles have been developed in the case law and I again refer to Andrews:

. . .I would say then that discrimination may be described as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burdens, obligations, or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits, and advantages available to other members of society. [8]

However, in assessing whether a complainant's rights have been infringed under subsection 15(1), it is not enough to focus only on the alleged ground of discrimination and decide whether or not it is an enumerated or analogous ground. The effect of the impugned distinction or classification on the complainant must be considered. Once it is accepted that not all distinctions and differentiations created by law are discriminatory, then a role must be assigned to subsection 15(1) which goes beyond the mere recognition of a legal distinction. A complainant under subsection 15(1) must show not only that he or she is not receiving equal treatment before and under the law or that the law has a differential impact on him or her in the protection and benefit accorded by law but, in addition, must show that the legislative impact of the law is discriminatory. [9]

[Emphasis added.]

Madam Justice Wilson of the Supreme Court of Canada expressed the following views in Turpin concerning the way to determine whether the impact is discriminatory:

In determining whether there is discrimination on grounds relating to the personal characteristics of the individual or group, it is important to look not only at the impugned legislation which has created a distinction that violates the right to equality but also to the larger social, political and legal context.

Accordingly, it is only by examining the larger context that a court can determine whether differential treatment results in inequality or whether, contrariwise, it would be identical treatment which would in the particular context result in inequality or foster disadvantage. A finding that there is discrimination will, I think, in most but perhaps not all cases, necessarily entail a search for disadvantage that exists apart from and independent of the particular legal distinction being challenged.

Mcintyre, J. recognized in Andrews that the "'enumerated and analogous grounds' approach most closely accords with the purposes of s. 15 and the definition of discrimination outlined above" (p. 182) and suggested that the alleged victims of discrimination in Andrews, i.e., non-citizens permanently resident in Canada were" a good example of a‘ discrete and insular minority’ who came within the protection of s. 15” (p. 183).

If the larger context is not examined, the s. 15 analysis may become a mechanical and sterile categorization process conducted entirely within the four corners of the impugned legislation. A determination as to whether or not discrimination is taking place, if based exclusively on an analysis of the law under challenge is likely, in my view, to result in the same kind of circularity which characterized the similarly situated similarly treated test clearly rejected by this Court in Andrews.™ [10]

I believe that this means that a classification is contrary to section 15 of the Charter if it has a discriminatory impact on the complainant. We must examine the legal context of the classification to determine whether this classification has such an impact. It must also be understood that discrimination is usually taken, although not necessarily, to refer to disadvantaged or insular groups which are more subject to discrimination and in respect of which the Courts must be more vigilant in examining their equality rights.

Let us first consider the aspect of the disadvantaged or insular group. In this provision, there are two groups: the group in which we find the taxpayer who is claiming the credit and the group in which we find the person living with and wholly dependent on an individual of the first group. I believe that I may say, without having any sociological studies at hand, that the second group, composed of persons who have attained the age of majority whose annual income does not exceed $5,000, may be a disadvantaged and even insular group. The first group, the group of taxpayers who may claim the credit, might be composed of poor people and wealthy people. In the case at bar, the person involved had a very modest income. No evidence was submitted in respect of the approximate composition of either of these groups. Given the circumstances of this appeal, I may consider the groups to be disadvantaged and, consequently, subject to a greater vigilance in the examination of the equality right.

Let us now turn to an examination of the legal context. As Madam Justice Wilson noted, the right to equality does not mean, that everyone in the same legal situation must be treated in the same way," [11] because then only administrative action would be affected by section 15 of the Charter. I believe, however, that the examination of which individuals are in a similar legal situation and should be entitled to the benefit of the Act, considering the purpose of the Act, before the challenged classification, and which individuals do not have access to it after the classification is a useful exercise. This exercise is done to determine the legal context of the classification and so assess its discriminatory impact. If I refer to Andrews [12] this is the exercise which was carried out in order to determine that subsection 15(1) of the Charter had been violated:

The distinction would deny admission to the practice of law to non-citizens who in all other respects are qualified.

In this appeal, the people who should be entitled to the benefit of the tax credit under paragraph 118(1)(b) of the Act, before the classification in issue, are people who are unmarried, or are married and live separately from their spouse and maintain a self-contained domestic establishment where they wholly support a related person whose income does not exceed a threshold established by the Act. After the classification, people in the same legal (and economic) situation, but where the related person is 18 years of age or over, except in the case of parents, grandparents and infirm persons, are excluded from the benefit.

Counsel for the respondent argues that the purpose of the tax credit provided in paragraph 118(1)(b) of the Act is to relieve a taxpayer who has a dependant who is related and is a minor, or who, if he is not a minor, is infirm or is a parent or grandparent. She emphasized the aspect of it being a credit for a dependant. It is this, but it is also something else. I do not believe that it is firstly a tax credit for a dependant because this credit is provided by paragraph 118(1)(d) of the Act to any individual. I believe that the primary purpose of this provision is the relief that the legislator wishes to provide for a person who maintains a domestic establishment where he or she supports a wholly dependent related person.

The purpose of this provision is explained as follows by Professor Harris:

Equivalent marital status is intended to apply only where the taxpayer, either alone or together with one or more others, must operate a larger residence, so as to maintain a dependent relative, than would otherwise have been necessary. [13]

It is the equivalent of the credit which is allowed for a married person who supports his or her spouse. This is the title which has been given to the deduction, and which is still given to this tax credit and which, in my view, is a good description of its nature. Historically, it was part of the category of deductions permitted for a taxpayer as a married person supporting his or her spouse, or as a person maintaining a domestic establishment and supporting therein a related person, or as an unmarried person or person who is not entitled to the first two credits. In other words, the provisions in paragraph 118(1)(a), 118(1)(b) and 118(1)(c) of the Act are provisions dealing with the basic credit of any individual, to which credit is added the credit provided in (a) and the credit provided in (b), depending on the circumstances. This category shall not be confused with the other categories of credits for dependants and other categories of credits allowed by the Act.

The purpose is to provide relief for the taxpayer in an amount equivalent to what is granted to a married person, in that such a taxpayer must maintain a larger self-contained domestic establishment than for a single person and must wholly support a related person.

Some taxpayers in this legal situation are not entitled to the tax credit provided in paragraph 118(1)(b) of the Act because of the age of the related person when that person is not a parent, a grandparent or an infirm person. Is the age condition of the related person, with the exception of a parent and grandparent, a condition relating to personal characteristics that creates an inequality which constitutes a disadvantage.

I believe that the answer lies more in the affirmative than in the negative. If this disadvantage were imposed on individuals in general, there would not be, in my view, discrimination. However, here it is a disadvantage imposed on a specific group which is, often, a disadvantaged group, and on which is imposed a burden that is not imposed on other groups in the same situation.

I must also take into account, as counsel for the respondent said, and I agree with that statement, that there are no vested rights to deductions in tax law. This is true, but there is nothing in our law to prevent the courts, even in the case of a legislative provision in the nature of tax deductions or credits, from ascertaining whether it complies with the rights guaranteed by the Charter, not in order to ensure continuity in the law, but to ascertain that the unequal treatment is not discrimination. The American courts have arrived at the same conclusion, although normally a classification will not be set aside if it is justified.

The concept that constitutional rights turn on whether a Governmental benefit is characterized as a right or privilege, has been emphatically rejected.

And normally a legislative classification made will not be set aside if any set of facts rationally justifying it is demonstrated or perceived by the courts. [14]

I can only find, in the legal context involved, that the appellant does not receive treatment equal to other taxpayers in the same legal situation and that the classification imposes on her a burden different from the others. I therefore conclude that the criterion of the age of the related person in the legal context of paragraph 118(1)(b) of the Act infringes the right to equality guaranteed by section 15 of the Charter.

Justification under section 1 of the Charter

If a court finds that section 15 has been infringed, it must ask whether this infringement is justified under section 1 of the Charter. I again refer to the comments of Mcintyre, J. in Andrews:

Any justification of an infringement which is found to have occurred must be made, if at all, under the broad provisions of s. 1. It must be admitted at once that the relationship between these two sections may well be difficult to determine on a wholly satisfactory basis. It is, however, important to keep them analytically distinct if for no other reason than the different attribution of the burden of proof. It is for the citizen to establish that his or her Charter right has been infringed and for the state to justify the infringement.^ [15]

[Emphasis added.]

Where discrimination is found a breach of s. 15(1) has occurred and—where s. 15(2) is not applicable—any justification, any consideration of the reasonableness of the enactment; indeed, any consideration of factors which could justify the discrimination and support the constitutionality of the impugned enactment would take place under s. 1. This approach would conform with the directions of this Court in earlier decisions concerning the application of s. 1 and at the same time would

allow for the screening out of the obviously trivial and vexatious claim. In this, it would provide a workable approach to the problem. [16]

In The Queen v. Oakes, [17] the Supreme Court of Canada set out the criteria that must be met in order to establish that a restriction is justifiable under section 1 of the Charter. First, it must be shown that the objective of the restriction is sufficiently important to warrant overriding a constitutionally protected right. An important objective is one which relates to pressing and substantial concerns. Second, the means chosen must be proportional to the objective. Chief Justice Dickson noted that the proportionality test involves the following three components; (1) The measures must be fair and not arbitrary, carefully designed to achieve the objective in question and rationally connected to that objective; (2) The means chosen must be such as to impair the right in question as little as possible; (3) There must be a proportionality between the effects of the measures limiting the constitutional right and the important objective in question.

Furthermore, the burden of proving that a restriction on a right guaranteed by the Charter is reasonable and justifiable in a free and democratic society rests on the person who is seeking to have the restriction upheld. The standard of proof applicable is proof on a balance of probabilities.

Counsel for the respondent referred to certain documents which were produced in preparation for enactment of the legislation in question.

The following passage appears in the Explanatory Notes accompanying the Bill, dated June 1988, at page 252:

New subsection 118(1) of the Act provides for the calculation of the deduction from tax payable in respect of married status, equivalent to married status, single status and dependants.

Further on, at page 253, the Explanatory Notes simply refer to the age requirement under paragraph 118(1)(b) of the Act but give no explanation.

This lack of explanation merely reflects another document, entitled Income Tax Reform, Tax Reform 1987, dated June 18, 1987, from the Minister of Finance. At page 71 of that document, there is a simple reference to this new requirement, with no explanation as to the reasons.

However, the Report on the White Paper on Tax Reform of the Standing Committee on Finance and Economic Affairs (House of Commons), dated November 1987, at pages 34 and 35, expressed concern about this change in respect of children 18 years of age and over. The same concern was noted in the Twentieth Report (Interim) of the Standing Senate Committee on Banking, Trade and Commerce, dated December 1987. I quote from page 35 of that report:

. . . While we consider the relief offered to parents of students in Universities and other post-secondary programmes, through transferable tax credits, to be a step forward, it seems unfair that many other dependent children, especially in areas of high youth unemployment, get short shrift from the proposals.

In respect of the evidence of pressing and substantial concerns, there was the statement that the legislator wanted to reduce the national debt, spread the tax burden as fairly as possible and give effect to certain priorities of the government. From this perspective, counsel for the respondent explained that the objective of this classification is to give priority to those under 18 years of age, to persons with infirmities and to the aged, and not to have taxpayers in general bear, through taxation, the burden of those who are not working. There is other legislation available to those people. The importance of the goal aimed at by the legislator cannot be and is not in dispute.

Let us now see if the means used to achieve this goal are proportional to it. May I find that there is a rational connection between the means chosen and the objective of the classification? The respondent argues that there is a rational connection between tax relief to assist those who seem to be in most need and the tax credit provided in paragraph 118(1)(b) of the Act, and that it is the means which infringes as little as possible on taxpayers who have adult dependants;

Thus the means of a tax credit for people who have minor or handicapped dependants impaired as little as possible the rights of people who have adult dependants who are not infirm not to be subject to discrimination because, moreover, since the credit is also given to a father, mother, grandfather, grandmother, thus it infringed as little as possible on adults who might still be dependent, and again, if the adult dependant was still in school, there were other means provided by the legislator for these people. [18]

[Translation]

Quoting from the comments of La Forest, J. in The Queen v. Edwards Books and Art Ltd., supra, in support of her argument, counsel for the respondent asserted that the legislator must have reasonable room to manoeuvre to meet conflicting pressures:

By the foregoing, I do not mean to suggest that this Court should, as a general rule, defer to legislative judgments when those judgments trench upon rights considered fundamental in a free and democratic society. Quite the contrary, I would have thought the Charter established the opposite regime. On the other hand, having accepted the importance of the legislative objective, one must in the present context recognize that if the legislative goal is to be achieved, it will inevitably be achieved to the detriment of some. Moreover, attempts to protect the rights of one group will also inevitably impose burdens on the rights of other groups. There is no perfect scenario in which the rights of all can be equally protected.

In seeking to achieve a goal that is demonstrably justified in a free and democratic society, therefore, a legislature must be given reasonable room to manoeuvre to meet these conflicting pressures, of course, what is reasonable will vary with the context. Regard must be had to the nature of the interest infringed and to the legislative scheme sought to be implemented. [19]

No one doubts that the legislator must have room to manoeuvre and that classifications are necessary. However, a classification within a group which is already limited by the income of the dependant and maintenance of a self- contained establishment must be considered with greater care than if it were a classification which affected the general public. As La Forest, J. stated,"what is reasonable will vary with the context. Regard must be had to the nature of the interest infringed and to the legislative scheme sought to be implemented".

Is the classification the means to attain the desired goals? No evidence was presented to me with respect to the savings which the classification in issue would produce in terms of the national debt, or as to how and in what respect this classification would benefit young and infirm people in terms of the priority given to young and infirm people or with respect to the composition of the groups which claimed this deduction before in terms of the priority given to the elderly and in terms of people who are protected by social legislation.

The deduction already existed in respect of people under 18 years of age and the infirm. With respect to the elderly, priority does not seem to have been given to all of them, since elderly related persons are excluded, with the exception of parents and grandparents. A taxpayer may have an elderly dependent sister, brother, uncle or aunt. This therefore does not seem to be the best means of attaining the desired priority in terms of the elderly. The suggestion that social welfare legislation is available to persons of full age who have no income is not really useful, because in cases where that legislation applies, the base income of the dependent related persons would be sufficient to exclude them from the benefit of the provision in issue. The credit applies to cases where social welfare or old age security legislation has not provided an income equal to the threshold amount provided in the Act. Consequently, one may think that it is not necessary to exclude the dependent related persons by using the age condition where other social legislation is involved. The base income criterion will suffice.

Are these the means which least impair the rights of the people affected? The fact that those who are the first to suffer from the classification are people in the appellants category hardly prompts me to believe that the means used to achieve the goals sought is the most logical and the one that will least affect the rights of the people concerned by the classification. As noted earlier, no evidence was presented to me as to the relevance of the means to the objectives in question or to show that these means were reasonable in terms of the objectives in question. It would be difficult for me to find that the effects of the means adopted on the taxpayers affected are proportional to the goals aimed at. I refer again to the comments of Mr. Justice La Forest in Andrews:

The degree to which a free and democratic society such as Canada should tolerate differentiation based on personal characteristics cannot be ascertained by an easy calculus. There will rarely, if ever, be a perfect congruence between means and ends, save where legislation has discriminatory purposes. The matter must, as earlier cases have held, involve a test of proportionality. In cases of this kind, the test must be approached in a flexible manner. The analysis should be functional, focusing on the character of the classification in question, the constitutional and societal importance of the interests adversely affected, the relative importance to the individuals affected of the benefit of which they are deprived, and the importance of the state interest. [20]

Under section 1 of the Charter, “it is entirely appropriate that government sustain the constitutionality of its conduct". [21] I am of the opinion that there is insufficient evidence before me to persuade me, on the balance of probabilities, that the classification in issue is justified under section 1 of the Charter, and accordingly I find that it is not.

Remedy

The remedy sought is to consider the requirement that the appellant’s son be under 18 years of age to be contrary to the Charter and to hold that the appellant was entitled to deduct the credit provided in paragraph 118(1)(b) of the Act from the tax payable by her. In fact, I am asked to strike out clause D of subparagraph 118(1)(b) (ii) of the Act under subsection 52(1) of the Constitution Act, 1982, which reads as follows:

extent of the inconsistency, of no

force or effect.

If I refer to Douglas/Kwantlen Faculty Assn. v. Douglas College, this Court has the power to rule on the constitutional validity of a provision in the exercise of its statutory mandate. I quote from the headnote of this decision, at page 572:

A tribunal’s power is that conferred by its statutory mandate. The jurisdiction of a statutory tribunal must be found in a statute and must extend not only to the subject matter of the application and the parties, but also to the remedy sought. A tribunal, in the exercise of its statutory mandate, is empowered to examine and rule upon the constitutional validity of a statute it is called upon to apply. Where a tribunal is engaged in performing what it was empowered to do by law, it is entitled not only to construe the relevant legislation but also to determine whether that legislation was validly enacted. Any law that is inconsistent with the provisions of the Constitution of Canada is, to the extent of its inconsistency, of no force or effect. A tribunal, if it finds a law it is applying to be constitutionally invalid, must treat it as having no force or effect under s. 52(1) of the Constitution Act, 1982. [22]

The mandate of this Court is described in section 12 of the Tax Court of Canada Act. That section provides, inter alia, that this Court shall hear appeals to the Court on matters arising under the Act. By virtue of subsection 171(1) of the Act:

171(1) The Tax Court of Canada may dispose of an appeal by

(a) dismissing it, or

(b) allowing it and

(i) vacating the assessment,

(ii) varying the assessment, or

(iii) referring the assessment back to the Minister for reconsideration and reassessment.

In Keyes v. M.N.R., Judge Bonner of this Court stated the following:

It is clear therefore that this Court, in the exercise of its jurisdiction to dispose of an appeal as laid down in section 171 of the Income Tax Act, is entitled and obliged to consider the constitutional validity of relevant statutes. The Family Allowances Act is not, as the respondent seems to suggest, in some strange way exempt from review. [23]

However, Judge Bonner was of the opinion that subsection 24(1) did not confer on this Court the power to amend the legislative provision in the manner requested by the taxpayer.

Judge Rip reached a similar conclusion when he was asked in Smith v. M.N.R. [24] with respect to paragraph 109(1)(b) of the Act, to rule that Clause C of subparagraph 109(1)(b)(ii) of the Act was invalid. While he was of the opinion that the Tax Court of Canada had a duty to review the constitutionality of the applicable legislation, he held that he would be exceeding his jurisdiction if he struck out the clause in question.

He refused to do so for the reason that this would be tantamount to amending subparagraph 109(1)(b)(ii) of the Act, which he did not have the power to do, because this condition appeared to him to be essential to the very existence of the provision.

A condition contained in a statutory provision is not to be trifled with since without such condition Parliament may or may not have enacted the provision.

For this court to decide this case as if subclause (C) had never been enacted would be tantamount to amending paragraph 109(1)(b) by deleting subclause (C), in my view making a policy decision which is beyond a Canadian court's constitutional authority and competence. In enacting subsection 109(1)(b) Parliament required that there be a degree of connection between the dependant and a taxpayer for the taxpayer to be permitted the deduction. To sever the connection is a function of the legislature, not the Court. [25]

In the two preceding cases the judges questioned whether it was appropriate for a court to decide the constitutional validity of a Provision of the Act in the context of an appeal of a tax assessment. This was because in both of those cases such a decision would have resulted in the defeat of the entire provision establishing the deduction, and the taxpayer would therefore have been unable to claim the deduction, so that the result in any event would have been that the assessment was correct.

In Tiberio v. M.N.R., in obiter, Judge Garon made the same comment:

If I had concluded that the provisions of the Income Tax Act under attack here violated the Charter and if I had decided these appeals as if the inconsistent provisions were of no force or effect, the fact would remain that this result would be of no assistance to the appellants since the deductions in respect of age in paragraph 109(1)(d) and subsection 118(2) and the larger deductions in respect of dependent children would not have been available to the appellants because they had to be considered as inoperative and of no force or effect. [26]

As we have seen in the decisions of the Tax Court of Canada, the judges of this Court have to date hesitated to strike out parts of provisions, either because the impugned condition appeared to be essential to the existence of the provision, or because if the provision was held to be invalid it would give the taxpayer no more rights. Yet the courts have on numerous occasions held provisions or parts of provisions to be inoperative.

The courts task in Russow v. British Columbia Attorney-General [27] was to consider the constitutional validity of section 164 of the School Act, R.S.B.C. 1979, c. 375, which required children to recite prayers in public school, although it was possible to be excused from prayer. The applicants asked the court to strike out the part of section 164 relating to religious practices. In considering this issue, Hollinrake, J. stated:

Counsel for the Attorney-General submits that the doctrine of the severance should not be applied here and thus all of s. 164 of the School Act should be declared of no force or effect if any part is so to be declared.

I accept the law on this subject as set out in The Canadian Constitution and the Courts, 3rd ed., by the Honourable Barry L. Strayer, at p. 301-2, where it states:

(b) Severability

Taking the process one step further, suppose that the court finds that certain provisions of a law standing alone would be valid whereas certain others would be invalid. Must it find the whole law to be invalid?

The classic test is well expressed in a 1947 judgment of the Judicial Committee of the Privy Council in A.G. Alta. v. A.G. Can. (Bill of Rights Reference) where it was said that if certain sections of a law are found to be invalid

The real question is whether what remains is so inextricably bound up with the part declared invalid that what remains cannot independently survive or, as it has sometimes been put, whether on a fair review of the whole matter it can be assumed that the legislature would have enacted what survives without enacting the part that is ultra vires at all.

The Courts have more commonly found against severability, usually finding that the otherwise valid portions are inextricably linked with the invalid provisions. They have refused to uphold remaining sections even where the legislators specifically provided that in case of a finding of invalidity of some provisions the remaining ones should not be held invalid, "the intention of Parliament being to give independent effect to the extent of its powers to every enactment and provision in this Act contained". The Judicial Committee found that despite the clear statement of legislative intent that Parliament would have passed the various provisions individually, the marketing scheme in question was so interconnected that the detailed provisions of the scheme would not stand without the board and the basic marketing arrangement which had been held ultra vires. This suggests that severability is as much a matter of functional considerations as it is of legislative intent and that the courts will have the last word. This is a proposition which must be viewed with some scepticism, as it should not be for the Court to decide that a truncated Act is nonsensical and therefore non-existent, if the Legislature has clearly said that it wishes surviving sections which are not per se invalid to remain.

In deciding whether to declare the whole of s. 164 of the School Act of no force or effect or just those words set out above, I must decide" whether on a fair review of the whole matter it can be assumed that the Legislature would have enacted what survives without enacting a part that is” in this case, of no force or effect. [28]

As noted above, a historical analysis of paragraph 118(1)(b) of the Act showed that the provision had existed for nearly 60 years in the past, without the condition as to the age of related persons. It therefore seems that the legislative provision which would remain in paragraph 118(1)(b) of the Act is not so inextricably bound to clause D of that paragraph that it could not survive without that clause.

In view of subsection 52(1) of the Constitution Act, 1982, which provides that a law is, to the extent of its inconsistency, of no effect, given that clause D of subparagraph 118(1)(b)(ii) of the Act violates section 15 of the Charter, given that this violation is not justifiable under section 1 of the Charter and given that clause D is not essential to the existence of that subparagraph, clause D of subparagraph 118(1)(b)(ii) of the Act must be considered to be of no effect and subparagraph 118(1)(b)(ii) must be read as if clause D had not been enacted.

Consequently, the appeal by the appellant is allowed, with costs, if any.

Appeal allowed.