Taxing Times at the Supreme Court of Canada: The Contributions of Justice L'Heureux-Dube to a Better Understanding of the Application of the Charter to the Income Tax System

• Author: Claire F.L. Young
• Pages: 229-245

Thirteen

Taxing

Times

at the

Supreme Court

of

Canada:

The

Contributions

of

Justice L'Heureux-Dube

to

a

Better Understanding

of the

Application

of

the

Charter

to

the

Income

Tax

System

CLAIRE

F.L.

YOUNG

Introduction

My

purpose

in

this article

is to

discuss

the

extremely important contribution

that

L'Heureux-Dube

J. has

made

to our

understanding

of the

function

and

purpose

of our tax

system.

In

brief,

I

shall demonstrate that

she

recognizes

that

the

income

tax

system

is

much more than

a

mere revenue-raising instru-

ment.

Her

analysis

is

that

the tax

system

is

also

an

important

social

and

eco-

nomic tool. Using this position

as her

starting

point,

she is

then able

to

situ-

ate

the tax

system

in its

social context when determining

the

application

of its

provisions. Such

an

approach leads

to a

fairer

and

more accurate interpreta-

tion

of a

highly

complex

piece

of

legislation.

I

also argue that

her

analysis

of the

application

of

section

15(1)

of the

Charter

of

Rights

and

Freedoms1

to our

income

tax

system

has

laid

the

ground-

work

for

future

successful challenges

to

discriminatory

provisions

of the

Income

Tax

Ad2

by

members

of

historically disadvantaged groups.

I

contend

that, drawing

on her

analysis, judges considering

the

application

of

section

15(1)

of the

Charter

to tax

legislation will

be

less deferential

in

their approach

to the

Act. They will also,

by

drawing

on her

contextual approach,

be

better

situated

to

understand

the

complex ways

in

which

the Act

discriminates

in

contravention

of the

Charter.

I

conclude

by

hypothesizing about

how her

analysis could

be

used

to

challenge

the

discriminatory application

of the

229

230

ADDING FEMINISM

TO LAW

spousal support

tax

rules

to

separated

or

divorced women.

I

focus

in

this arti-

cle

on two of her tax

decisions, namely,

Symes

v.

Canada3

and

Thibaudeau

v.

Canada!"

In

both

those cases

the

Supreme Court

of

Canada split along gen-

der

lines, with

the

majority

of the

Court consisting

of all the

male judges

while

the two

women

on the

Court were

in

dissent.

Symes

v.

Canada

Symes'

was the first

case

heard

by the

Supreme Court

of

Canada

in

which

a

tax-

payer argued

that

a

provision

of the Act

discriminated

in

contravention

of

sec-

tion

15(1)

of the

Charter.

Section

63 of the Act

provides that certain childcare

expenses

are

deductible

in the

computation

of

income under

the

Act. Currently

the

amount

of the

deduction

is up to

$7,000

for

childcare expenses

in

respect

of

a

child under seven

and up to

$4,000

in

respect

of a

child aged seven

to fif-

teen.6

In

Symes,

the

taxpayer

was a

lawyer

who

claimed that

her

childcare

expenses

should

be

deductible

as a

business expense under sections

9 and

18(l)(a)

of the

Act.

If the

expense

was

held

to be a

business expense,

in

con-

trast

to the

deduction under section

63,

there would

be no

limitation

on the

amount that could

be

deducted. Section

18(1)

(a) of the Act

provides that

no

expense

is

deductible "except

to the

extent that

it was

made

or

incurred

by the

taxpayer

for the

purpose

of

gaining

or

producing income

from

the

business."

Symes

made

a

two-part argument.

She

contended,

first,

that

the

salary paid

to

the

nanny

who

cared

for her

children

was a

business expense incurred

to

gain

or

produce income.

Had she not had

childcare help,

she

would

not

have been

able

to

practise law,

and

consequently, would have earned

no

income

from

her

business. Second,

she

argued that

to

disallow

her the

deduction

was to

deny

her

equal

benefit

of the law on the

basis

of her

sex. This disallowance

was in

con-

travention

of

section

15(1)

of the

Charter

because

it has a

disproportionate

impact

on

women

who are

primarily responsible

for

childcare.

At

the

Federal Court

(Trial

Division),7

Cullen

J.

held that

Ms.

Symes's

expenses should

be

deductible

for two

reasons.

He

found,

first,

that

the

issue

had to be

interpreted

in

light

of the

"social

and

economic realities

of the

times."8

He

held that Symes

had

"exercised good business

and

commercial

judgment

in

deciding

to

dedicate part

of her

resources

from

the law

practice

to the

provision

of

child

care"9

and

that, consequently,

the

childcare expens-