Symes v. Minister of National Revenue, (1993) 161 N.R. 243 (SCC)

• Judge: McLachlin, Iacobucci and Major, JJ.
• Court: Supreme Court (Canada)
• Case Date: December 16, 1993
• Jurisdiction: Canada (Federal)
• Citations: (1993), 161 N.R. 243 (SCC);19 CRR (2d) 1;94 DTC 6001;44 ACWS (3d) 824;[1993] CarswellNat 1178;161 NR 243;[1993] 4 SCR 695;1993 CanLII 55 (SCC);[1993] SCJ No 131 (QL);110 DLR (4th) 470;[1994] 1 CTC 40;[1993] ACS no 131

Symes v. MNR (1993), 161 N.R. 243 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Elizabeth C. Symes (appellant) v. Her Majesty the Queen (respondent) and the Attorney General of Quebec, the Charter Committee on Poverty Issues and the Canadian Bar Association (intervenors)

(22659)

Indexed As: Symes v. Minister of National Revenue

Supreme Court of Canada

Lamer, C.J.C., La Forest, L'Heureux-

Dubé, Sopinka, Gonthier, Cory,

McLachlin, Iacobucci and Major, JJ.

December 16, 1993.

Summary:

Symes was a full-time practising lawyer and partner in a Toronto law firm. From 1982 to 1985 she employed a nanny to care for her children while she worked. Symes deducted the nanny's salary (over $10,000/year) as a business expense for income tax purposes. The Minister of Na­tional Revenue reassessed her, disallowing the deductions and limiting her to the stan­dard child care deduction ($1,000 for 1982, $2,000 for 1983 and 1984 and $4,000 for 1985). Symes appealed, claiming that the nanny's salary was a proper business expense under the Income Tax Act and that the refusal to permit her deductions constituted discrimination contrary to s. 15 of the Char­ter of Rights and Freedoms.

The Federal Court of Canada, Trial Divi­sion, in a judgment reported 25 F.T.R. 306, allowed the appeal, holding that she was entitled to deduct the nanny's salary as a business expense for the tax years in ques­tion. The Minister appealed.

The Federal Court of Appeal, in a judg­ment reported 127 N.R. 348, allowed the appeal. The nanny's salary fell clearly within child care expenses within the meaning of s. 63 of the Act and was not a business expense. Symes appealed.

The Supreme Court of Canada, L'Heu­reux-Dubé and McLachlin, JJ., dissenting, dismissed the appeal. Symes was limited to child care expenses deductible under s. 63 and the denial of a business expense deduc­tion did not violate s. 15 of the Charter.

Civil Rights - Topic 5679

Equality and protection of the law - Income tax - A full-time, married female lawyer paid a nanny to care for her children while she practised law as a part­ner in a law firm - The Minister disal­lowed her deductions of the nanny's wages as business expenses, limiting her to the child care deduction under s. 63 of the Income Tax Act - The Supreme Court of Canada held that the lawyer failed to prove s. 63 constituted discrimination contrary to s. 15 of the Charter of Rights and Free­doms - The court stated that, inter alia, s. 63 did not draw a distinction (intentionally or otherwise) between the lawyer and others based upon a personal characteristic (i.e., sex) - The taxpayer failed to show that women disproportionately paid child care expenses - The fact that women incurred a disproportionate share of the social cost of child care was not sufficient to prove women disproportionately incurred the actual expense of child care - See paragraphs 118 to 151.

Civil Rights - Topic 8668

Canadian Charter of Rights and Freedoms - Equality rights (s. 15) - Breach of - What constitutes - [See Civil Rights - Topic 5679 ].

Income Tax - Topic 1129

Income from business or property - De­ductions - Requirement that expense be incurred for producing income - [See Income Tax - Topic 1150.1 ].

Income Tax - Topic 1150.1

Income from business or property - De­ductions - Child care expenses - Symes, a married woman and mother practising law as a partner, employed a nanny to care for her children - Symes deducted the nanny's wages as a business expense - The Minister limited the deductions to the maximum child care deductions permitted under s. 63 of the Income Tax Act - Child care deductions would be a business expense only if incurred for the purpose of gaining or producing income from business (s. 18(1)(a)) - The Supreme Court of Canada stated that s. 63 provided a com­plete code for child care expense deduc­tions - The same expense could not be a business expense in calculating profit from business (i.e., income) - There was no ambiguity; s. 63 solely determined deduc­tions for child care expenses - The court stated that it was, accordingly, unnecessary to decide whether ss. 9, 18(1)(a) and 18(1)(h) would, absent s. 63, permit a business expense deduction for child care costs - See paragraphs 1 to 107.

Income Tax - Topic 1305

Income from business or property - De­ductions not allowed - Personal or living expenses - [See Income Tax - Topic 1150.1 ].

Income Tax - Topic 1305

Income from business or property - De­ductions not allowed - Personal or living expenses - The Supreme Court of Canada discussed whether child care expenses of a working taxpayer constituted a business expense or a personal expense - See para­graphs 42 to 85.

Cases Noticed:

Bowers v. Harding (1891), 3 Tax Cas. 22 (Q.B.), refd to. [para. 9].

Andrews v. Law Society of British Co­lumbia, [1989] 1 S.C.R. 143; 91 N.R. 255; [1989] 2 W.W.R. 289; 56 D.L.R.(4th) 1; 34 B.C.L.R.(2d) 273; 36 C.R.R. 193; 25 C.C.E.L. 255, refd to. [para. 14].

Davidson v. Slaight Communications Inc., [1989] 1 S.C.R. 1038; 93 N.R. 183; 59 D.L.R.(4th) 416; 26 C.C.E.L. 85; 89 C.L.L.C. 14,031; 40 C.R.R. 100, refd to. [para. 23].

Hills v. Canada (Attorney General), [1988] 1 S.C.R. 513; 84 N.R. 86; 48 D.L.R.(4th) 193; 88 C.L.L.C. 14,011, refd to. [para. 23].

Royal Trust v. Minister of National Reve­nue (1957), 57 D.T.C. 1055 (Ex. Ct.), refd to. [para. 34].

Daley v. Minister of National Revenue, [1950] Ex. C.R. 516, refd to. [para. 34].

R. v. MerBan Capital Corp. (1989), 89 D.T.C. 5404 (F.C.A.), refd to. [para. 34].

Neonex International Ltd. v. Minister of National Revenue, [1978] C.T.C. 485; 22 N.R. 284 (F.C.A.), refd to. [para. 37].

Associated Investors of Canada Ltd. v. Minister of National Revenue, [1967] 2 Ex. C.R. 96, refd to. [para. 40].

Canadian General Electric Co. v. Minister of National Revenue, [1962] S.C.R. 3, refd to. [para. 40].

R. v. Salituro, [1991] 3 S.C.R. 654; 131 N.R. 161; 50 O.A.C. 125; 68 C.C.C.(3d) 289, refd to. [para. 50].

Imperial Oil Ltd. v. Minister of National Revenue, [1947] C.T.C. 353 (Ex. Ct.), refd to. [para. 51].

Dominion Natural Gas Co. v. Minister of National Revenue, [1941] S.C.R. 19, refd to. [para. 53].

Kellogg Co. of Canada Ltd. v. Minister of National Revenue, [1942] C.T.C. 51 (Ex. Ct.), refd to. [para. 54].

Hudson's Bay Co. v. Minister of National Revenue, [1947] C.T.C. 86 (Ex. Ct.), refd to. [para. 54].

Premium Iron Ores Ltd. v. Minister of National Revenue, [1966] S.C.R. 685, refd to. [para. 56].

Mattabi Mines Ltd. v. Ontario (Minister of Revenue), [1988] 2 S.C.R. 175; 87 N.R. 300; 29 O.A.C. 268, refd to. [para. 60].

Brooks, Allen and Dixon et al. v. Canada Safeway Ltd., [1989] 1 S.C.R. 1219; 94 N.R. 373; 58 Man.R.(2d) 161; 59 D.L.R.(4th) 321, refd to. [para. 77].

Olympia Floor & Wall Tile (Quebec) Ltd. v. Minister of National Revenue, [1970] Ex. C.R. 274 (Ex. Ct.), refd to. [para. 86].

Impenco Ltd. v. Minister of National Rev­enue (1988), 88 D.T.C. 1242 (T.C.C.), refd to. [para. 97].

R. v. Big M Drug Mart, [1985] 1 S.C.R. 295; [1985] 3 W.W.R. 481; 58 N.R. 81; 60 A.R. 161; 18 C.C.C.(3d) 385; 18 D.L.R.(4th) 321; 37 Alta. L.R.(2d) 97; 85 C.L.L.C. 14,203; 13 C.R.R. 64, refd to. [para. 109].

Public Service Alliance of Canada v. Canada, [1987] 1 S.C.R. 424; 75 N.R. 161; 38 D.L.R.(4th) 249, refd to. [para. 109].

Tétreault-Gadoury v. Canada Employment and Immigration Commission, [1991] 2 S.C.R. 22; 126 N.R. 1; 81 D.L.R.(4th) 358, refd to. [para. 115].

McKinney v. University of Guelph et al., [1990] 3 S.C.R. 229; 118 N.R. 1; 45 O.A.C. 1; 76 D.L.R.(4th) 545; 2 C.R.R.(2d) 1, refd to. [para. 115].

Ontario Human Rights Commission and O'Malley v. Simpsons-Sears, [1985] 2 S.C.R. 536; 64 N.R. 161; 12 O.A.C. 241; 23 D.L.R.(4th) 321; 52 O.R.(2d) 799; 9 C.C.E.L. 185; 17 Admin. L.R. 89; 86 C.L.L.C. 17,002, refd to. [para. 115].

R. v. Turpin, Siddiqui and Clauzel, [1989] 1 S.C.R. 1296; 96 N.R. 115; 34 O.A.C. 115; 48 C.C.C.(3d) 8; 69 C.R.(3d) 197; 39 C.R.R. 193, refd to. [para. 116].

R. v. Swain, [1991] 1 S.C.R. 933; 125 N.R. 1; 47 O.A.C. 81; 63 C.C.C.(3d) 481, refd to. [para. 117].

Janzen and Govereau v. Pharos Restaurant and Grammas et al., [1989] 1 S.C.R. 1252; 95 N.R. 81; 58 Man.R.(2d) 1, refd to. [para. 144].

Schachtschneider v. Minister of National Revenue (1993), 154 N.R. 321 (F.C.A.), refd to. [para. 144].

R. v. Oakes, [1986] 1 S.C.R. 103; 65 N.R. 87; 14 O.A.C. 335; 26 D.L.R.(4th) 200; 50 C.R.(3d) 1; 24 C.C.C.(3d) 321; 19 C.R.R. 308, refd to. [para. 153].

Schachter v. Canada et al., [1992] 2 S.C.R. 679; 139 N.R. 1, refd to. [para. 153].

Edmonton Journal v. Alberta (Attorney General), [1989] 2 S.C.R. 1326; 102 N.R. 321; 103 A.R. 321; [1990] 1 W.W.R. 577; 64 D.L.R.(4th) 577; 71 Alta. L.R.(2d) 273; 45 C.R.R. 1, refd to. [para. 189].

Murdoch v. Murdoch, [1975] 1 S.C.R. 423, refd to. [para. 190].

Rathwell v. Rathwell, [1978] 2 S.C.R. 436; 19 N.R. 91; 83 D.L.R.(3d) 289; [1978] 2 W.W.R. 101; 1 E.T.R. 307; 1 R.F.L.(2d) 1, refd to. [para. 190].

Canada (Attorney General) v. Mossop, [1993] 1 S.C.R. 554; 149 N.R. 1, refd to. [para. 190].

Action Travail des Femmes v. Canadian National Railway Co., [1987] 1 S.C.R. 1114; 76 N.R. 161, refd to. [para. 191].

Friedland v. Minister of National Revenue (1989), 27 F.T.R. 154; 89 D.T.C. 5341 (T.D.), refd to. [para. 198].

Stubart Investments Ltd. v. Minister of National Revenue, [1984] 1 S.C.R. 536; 53 N.R. 241; 84 D.T.C. 6305; [1984] C.T.C. 294, refd to. [para. 213].

Johns-Manville Canada Inc. v. Minister of National Revenue, [1985] 2 S.C.R. 46; 60 N.R. 244, refd to. [para. 217].

Ontario Public Service Employees Union et al. v. National Citizens' Coalition Inc. et al. (1987), 60 O.R.(2d) 26 (H.C.), affd. 38 O.A.C. 70; 74 O.R.(2d) 260 (C.A.), refd to. [paras. 24, 239].

R. v. Seaboyer and Gayme, [1991] 2 S.C.R. 577; 128 N.R. 81; 48 O.A.C. 81; 66 C.R.(3d) 321, refd to. [para. 242].

Statutes Noticed:

Canadian Charter of Rights and Freedoms 1982, generally [para. 5].

Constitution Act, 1982, sect. 52(1) [para. 5].

Criminal Code, R.S.C. 1985, c. C-46, sect. 215 [para. 79].

Income Tax Act, S.C. 1948, c. 52, sect. 12(1)(a) [para. 55].

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 4, sect. 9(1), sect. 18(1), sect. 63, sect. 67 [para. 5].

Income Tax Act (U.K.), 16 & 17 Vict., c. 34, s. 51 [para. 43].

Income Tax Act Regulations (Can.), C.R.C. 1978, c. 945, Schedule II, Class 8(i) [para. 57].

Income War Tax Act, R.S.C. 1927, c. 97, generally [para. 34].

Authors and Works Noticed:

Abella, R.S., Report of the Commission on Equality in Employment (1984), p. 177 [paras. 133, 246].

Arnold, B.J., The Deduction for Child Care Expenses in the United States and Canada: A Comparative Analysis (1973), 12 West. Ont. L. Rev. 1, pp. 27 [para. 42]; 39, 40 [para. 81].

Arnold, B.J., and T.W. Edgar, Materials on Canadian Income Tax (9th Ed. 1990), p. 336 [para. 37].

Belcourt, Monica, Ronald J. Burke and Hélène Lee-Gosselin, The Glass Box: Women Business Owners in Canada (1991), pp. 10 [para. 249]; 65 [para. 251].

Benson, E.J., Proposals for Tax Reform (1969), pp. 10 [para. 221]; 15 [paras. 99, 221].

Blumberg, Grace, Sexism in the Code: A Comparative Study of Income Taxation of Working Wives and Mothers (1971-1972), 21 Buff. L. Rev. 49, p. 64 [para. 205].

Brockman, Joan, Social Authority, Legal Discourse, and Women's Voices (1992), 21 Man. L.J. 213, p. 233 [para. 213].

Brooks, Neil, The Principles Underlying the Deduction of Business Expenses, in Brian G. Hansen, Vern Krishna and James A. Rendall, eds., Essays on Cana­dian Taxation (1978), pp. 249 [para. 200]; 253, 254 [para. 38]; 256 [paras. 68, 69]; 258 [paras. 70, 71]; 259 [paras. 68, 200].

Canada, House of Commons, Standing Committee on Finance, Trade and Eco­nomic Affairs, Minutes of Proceedings and Evidence, Issue No. 70, (1970), p. 70:145 [para. 221].

Canada, Royal Commission on Taxation, Report of the Royal Commission on Taxation (1966), vol. 2, p. 17 [para. 224]; vol. 3, p. 19 [para. 221].

Canada, Statistics Canada, Who's Looking After the Kids? Child Care Arrangements of Working Mothers, by Susan Cromp­ton, in Perspectives on Labour and Income (1993), vol. 3, no. 2, p. 68 [para. 246].

Canada, Status of Women Canada, Report of the Task Force on Child Care (1985), pp. 169 [para. 156]; 173 [para. 140]; 295 [para. 143]; 375 [para. 157].

Canadian Bar Association, Task Force on Gender Equality in the Legal Profession, Touchstones for Change: Equality, Di­versity and Accountability (1993), p. 65 [para. 206].

Côté, Pierre-André, The Interpretation of Legislation in Canada (2nd Ed. 1991), p. 227 [para. 190].

Driedger, E.A., Construction of Statutes (2nd Ed. 1983), pp. 87 [paras. 85, 213]; 89 [para. 190].

Eichler, Margrit, Nonsexist Research Methods: A Practical Guide (1988), p. 78 [para. 227].

Goodison, Don, Nanny Means Business, in CGA Magazine (1989), p. 15 [para. 223].

Grant, Isabel, and Lynn Smith, Gender Representation in the Canadian Judiciary, In Appointing Judges: Philosophy, Poli­tics and Practice (1990), p. 79 [para. 207].

Gunderson, Morley, Leon Muszynski and Jennifer Keck, Women and Labour Mar­ket Poverty (1990), p. 30 [para. 247].

Harris, Edwin C., Canadian Income Taxa­tion (4th Ed. 1986), pp. 191, 192 [para. 59].

Hershfield, J.E., Recent Trends in the Deduction of Expenses in Computing Income (1989), pp. 44:2 [para. 42]; 44:8, 44:9 [para. 65].

Holmes, Oliver Wendell, The Common Law (1881), p. 1 [para. 213].

Ish, Daniel, James A. Rendall and Catherine A. Brown, Deductions, in B.J. Arnold and T.W. Edgar, eds., Materials on Canadian Income Tax (9th Ed. 1990), pp. 387, 388 [para. 39].

Krasa, Eva M., The Deductibility of Fines, Penalties, Damages, and Contract Termi­nation Payments (1990), 38 Can. Tax J. 1399, generally [para. 196].

Krishna, Vern, Perspectives on Tax Policy, in Brian G. Hansen, Vern Krishna and James A. Rendall, eds., Essays on Cana­dian Taxation (1978), pp. 253, 254 [para. 38].

Krishna, Vern, The Fundamentals of Canadian Income Tax (4th Ed. 1992), pp. 365, 367 [para. 38].

Law Society of Upper Canada, Transitions in the Ontario Legal Profession: A Sur­vey of Lawyers Called to the Bar Between 1975 and 1990 (1991), p. 47 [para. 130].

Lero, Donna S., et al., Canadian National Child Care Study: Parental Work Pat­terns and Child Care Needs (1992), p. 23 [para. 129].

MacKinnon, Catherine A., Reflections on Sex Equality Under Law (1991), 100 Yale L.J. 1281, p. 1297 [para. 234].

Macklin, Audrey, Symes v. M.N.R.: Where Sex Meets Class (1992), 5 C.J.W.L. 498, pp. 507, 508 [para. 83]; 512 [paras. 137, 236].

Mahoney, Kathleen, Daycare and Equality in Canada, in Research Studies of the Commission on Equality in Employment (1985), pp. 157, 166 [para. 199].

McCaffery, Edward J., Taxation and the Family: A Fresh Look at Behavioral Gender Biases in the Code (1993), 40 UCLA L. Rev. 983, p. 987 [para. 233].

McIntyre, Michael J., Evaluating the New Tax Credit for Child Care and Maid Service (1977), 5 Tax Notes 7, p. 8 [para. 79].

Smith, Dorothy E., A Peculiar Eclipsing: Women's Exclusion From Man's Culture (1978), 1 Women's Studies Int. Quart. 281 [para. 201].

Surrey, Stanley, Pathways to Tax Reform (1973), generally [para. 120].

Surrey, Stanley S., and P.R. McDaniel, Tax Expenditures (1985), p. 3 [para. 120].

Thomas, Richard B., No to Nanny Expense Deductions (1991), 39 Can. Tax J. 950, p. 953 [para. 218].

Wilson, Bertha, Women, the Family and The Constitutional Protection of Privacy (1992), 17 Queen's L.J. 5, p. 13 [para. 242].

Woodman, Faye, A Child Care Expenses Deduction, Tax Reform and the Charter: Some Modest Proposals (1990), 8 Can. J. Fam. L. 371, pp. 377 [paras. 216, 218]; 386 [para. 124].

Young, Claire F.L., Case Comment on Symes v. The Queen, [1991] Brit. Tax Rev. 105, pp. 108, 109 [para. 224].

Young, Claire F.L., Impact of Feminist Analysis on Tax Law and Policy, In Feminist Analysis: Challenging Law and Legal Processes (1992), p. 1 [para. 178].

Counsel:

Mary Eberts and Wendy M. Matheson, for the appellant;

John R. Power, Q.C., and Sandra E. Phillips, for the respondent;

Monique Rousseau, for the intervenor, Attorney General of Quebec;

Raj Anand, for the intervenor, Charter Committee on Poverty Issues;

J.J. Camp, Q.C., and Melina Buckley, for the intervenor, Canadian Bar Association.

Solicitors of Record:

Tory Tory DesLauriers & Binnington, Toronto, Ontario, for the appellant;

John R. Power, Ottawa, Ontario, for the respondent;

Monique Rousseau, Sainte-Foy, Quebec, for the intervenor, Attorney General of Quebec;

Scott & Aylen, Toronto, Ontario, for the intervenor, Charter Committee on Pover­ty Issues;

Canadian Bar Association, Ottawa, Ontario, for the intervenor, Canadian Bar Association.

This appeal was heard on March 2, 1993, before Lamer, C.J.C., La Forest, L'Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin, Iacobucci and Major, JJ., of the Supreme Court of Canada.

On December 16, 1993, the judgment of the Supreme Court of Canada was delivered in both official languages and the following opinions were filed:

Iacobucci, J. (Lamer, C.J.C., La Forest, Sopinka, Gonthier, Cory and Major, JJ., concurring) - see paragraphs 1 to 162;

L'Heureux-Dubé, J., dissenting - see paragraphs 163 to 254;

McLachlin, J., dissenting - see para­graph 255.