Lamarre J. found that the taxpayer, a U.S. citizen, was resident in Canada during the relevant tax period, pursuant to Art. IV(2)(b) of the Canada-U.S. Convention. The taxpayer had spent only 69 of 623 days in the United States.
The taxpayer's residence could not be determined under Art. IV(2)(a). He had permanent homes in both Tennessee and Ontario, both of which were purchased after his first work contract in Ontario. His employment was in Ontario, but his prior work history and his investments were mainly in the U.S. He maintained hobbies and family ties in Tennessee, but established social ties and health coverage in Ontario. Lamarre J. found that this evidence was not determinative of his centre of vital interests.
Turning to Art. IV(2)(b), Lamarre J. found that the taxpayer's habitual abode was in Canada. Following a review of the OECD commentaries and the Vienna Convention, she concluded (at para. 30):
[T]he proper approach to determining whether the Appellant had an habitual abode in the United States is to enquire whether he resided there habitually, in the sense that he regularly, customarily or usually lived in the United States.
In affirming that this decision, Dawson J.A. remarked (at para. 6):
The [vital interests] test to be applied under the Convention is one of fact: in which, if any, state does the individual have closer personal and economic relations?
Furthermore, the trial judge had made no error in applying the habitual abode test, as stated most recently in Lingle at para. 6.