Date: 20051021
Docket: T-950-05
Citation: 2005 FC 1431
Ottawa, Ontario, this 21st day of October, 2005
Present: THE HONOURABLE MR. JUSTICE SIMON NOËL
BETWEEN:
RICHARD COLLINS
Applicant
and
CANADA CUSTOMS AND REVENUE AGENCY
Respondent
[1] This is an application by Richard Collins (the Applicant), a self-represented applicant, for judicial review of a decision of the Canada Customs and Revenue Agency ("CCRA") to seize his pension proceeds in payment of his tax debts. The Applicant, a former resident of Nova Scotia, asks for an order to require the CCRA to cease its collection of tax debts, and for the restitution of the amounts already seized. The applicant now lives in the United States and has requested, pursuant to Rule 369 of the Federal Court Rules, SOR/98-106, for this motion to be decided on the basis of written representations only. The respondent did not oppose.
FACTS
[2] The Applicant's records with the CCRA are summarized in Lucie Allaire's affidavit dated September 30, 2005. According to this affidavit, the seizure of the Applicant's proceeds were executed in relation with 1986, 1988 and 1994 taxation years.
1. 1986 and 1988 Taxation Years
[3] As per Ms. Allaire's affidavit, Notices of Assessment were issued by the Minister of National Revenue ("Minister") for the 1986 and 1988 taxation years on October 14, 1987 and August 8, 1989, respectively. The Minister reassessed the applicant's tax payable for the 1986 and 1988 taxation years by Notices of Reassessment dated October 16, 1989, which were confirmed on or about August 1st, 1990. On October 27, 1989, the Applicant filed Notices of Objection with regards to the 1986 and 1988 taxation years. The applicant then filed a Notice of Appeal to the Tax Court of Canada on December 13, 1990 for the 1986 taxation year. This appeal was dismissed on September 29, 1992. The Notice of Objection for the 1988 taxation year was partly granted. Pursuant to this decision, the tax payable by the Applicant for the 1988 taxation year was reassessed on September 25, 1990. The applicant also filed an application for an extension of time to appeal to the Tax Court of Canada on November 10, 2004, for the 1986 and 1988 taxation years. This application was dismissed on March 23, 2005.
[4] According to Ms. Allaire's affidavit, as of September 28, 2005, the Applicant's outstanding federal and provincial tax liability amounts to $42 025,82 and $13 408,25, respectively, for the 1986 and the 1988 taxation years.
2. 1994 Taxation Year
[5] The Applicant was assessed for the 1994 taxation year on June 15, 1995.
[6] As of September 28, 2005, the Applicant's outstanding federal and provincial tax liability was $799,11 with respect to his 1994 taxation year.
3. The Respondent's letters and the seizure
[7] As per Ms. Allaire's affidavit, the Respondent decided to collect arrears from the Applicant's pension proceeds from April 2004 to April 2005. A total amount of $1 724, 43 has been seized to date. Between May and September 1995, letters were sent to the applicant asking for the payment of arrears.
ISSUE
- Was the Respondent lawfully entitled to collect the Applicant's tax debts in respect of his 1986, 1988 and 1994 taxation years?
- Were tax debts of the Applicant prescribed as a result of the decision of the Supreme Court in Markevich v. Canada [2003] 1 R.C.S. 94, 2003 CSC 9?
ANALYSIS
[8] In Markevich v. Canada, supra, the Supreme Court of Canada held that, under section 32 of the Crown Liability and Proceedings Act, R.S. 1985, c. 50, the limitation period for the collection of federal income tax debt was six years. As for the collection of provincial tax debt, the Supreme Court held that the "federal Crown's right to collect provincial taxes is no greater than the right delegated to it by the province". Therefore, the time limitation found in the provincial law was applicable to the CCRA. The Applicant's argument is primarly based on this judgement of the Supreme Court of Canada. In his view, the CCRA should have been more diligent, and is therefore no longer entitled to the collection of arrears by reason of prescription.
[9] In response to this decision, Parliament amended section 222 of the Income Tax Act, R.S.C. 1985 (5th Suppl.) ("Federal Act") by enacting Bill C-30, An act to implement certain provisions of the budget tabled in Parliament, 3rd Sess., 37th Parl, 2004 (received Royal Assent on May 14, 2004) ("Bill C-30"). Subsection 222(4) of the Federal Act reads :
(4) The limitation period for the collection of a tax debt of a taxpayer
(a) begins
(i) if a notice of assessment, or a notice referred to in subsection 226(1), in respect of the tax debt is mailed to or served on the taxpayer, after March 3, 2004, on the day that is 90 days after the day on which the last one of those notices is mailed or served, and
(ii) if subparagraph (i) does not apply and the tax debt was payable on March 4, 2004, or would have been payable on that date but for a limitation period that otherwise applied to the collection of the tax debt, on March 4, 2004; and
(b) ends, subject to subsection (8), on the day that is 10 years after the day on which it begins. (my emphasis)
(4) Le délai de prescription pour le recouvrement d'une dette fiscale d'un contribuable :
a) commence à courir :
(i) si un avis de cotisation, ou un avis visé au paragraphe 226(1), concernant la dette est posté ou signifié au contribuable après le 3 mars 2004, le quatre-vingt-dixième jour suivant le jour où le dernier de ces avis est posté ou signifié,
(ii) si le sous-alinéa (i) ne s'applique pas et que la dette était exigible le 4 mars 2004, ou l'aurait étéen l'absence de tout délai de prescription qui s'est appliquépar ailleurs au recouvrement de la dette, le 4 mars 2004
b) prend fin, sous réserve du paragraphe (8), dix ans après le jour de son début. (je souligne)
[10] The wording of subparagraph 222(4) ii) is clear. The word « tout » in the French version leaves no room for interpretation (the English version uses the general expression "a limitation"). Subparagraph 222(4)ii) overrules any limitation period that existed prior to the adoption of Bill C-30. The Federal Court and the Federal Court of Appeal jurisprudence is unambiguous on this issue (See C.I. Mutual funds Inc. v. Canada, [1999] F.C.J. No. 199, [1999] F.C. 613; Gibson v. Canada, [2005] F.C.J. No. 817, 2005 FCA 180). A tax debt that was prescribed prior to the adoption of Bill C-30 can nevertheless be enforced by the CCRA under the Act.
[11] As for provincial tax liability, the applicant was a resident of the province of Nova Scotia in 1986, 1988 and 1994. In virtue of a tax collection agreement between this province and the Federal government, the latter is responsible for the collection of taxes on behalf of the former. Section 81 of Nova Scotia's Income Tax Act, R.S.N.S. 1989, c. 217 ("N.S. Act") provides that section 222 of the Federal Act applies to the collection of provincial tax debts. In fact, most of the "enforcement" sections of the N.S. Act refer and make applicable different sections of the Federal Act. Subsection 2(10) further provides that :
Where a provision, in this subsection referred to as "that section", of the Federal Act or the Federal Regulations is made applicable for the purpose of this Act, that section, as amended from time to time, applies with such modifications as the circumstances require for the purpose of this Act as though it had been enacted as a provision of this Act, and in applying that section for the purpose of this Act, in addition to any other modifications required by the circumstances [...]
Therefore, subparagraph 222(4)ii) is applicable to the provincial tax liability, and empowers the CCRA to collect the tax debts owed by the Applicant to the Province of Nova Scotia, until March 4, 2014.
[12] For all these reasons, the Respondent was entitled to collect the Applicant's tax debts in respect of his 1986, 1988 and 1994 taxation years.
[13] In the Applicant's view, « the new legislation can in no way revive an alleged fiscal debt that was already extinguished one year earlier by the aforementioned ruling of the Supreme Court of Canada [Markevich v. Canada, supra], for if that were the case, it would have for effect the retroactive annulment of the actual ruling by the Supreme Court of Canada, which makes absolutely no sense » . With deference for the Applicant, the Parliament has discretion to overrule Supreme Court judgments. The principle of parliamentary supremacy is a foundation of Canadian constitutional law: the judiciary must abide by the statutes adopted by Parliament.
COSTS
[14] The Respondent asked for this judicial review application to be dismissed with costs. Having in mind the particularities of this case, no costs are allowed.
ORDER
THIS COURT ORDERS THAT:
- The application is dismissed without costs.
"Simon Noël"
"Judge"
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
STYLE OF CAUSE: RICHARD COLLINS v. CANADA CUSTOMS AND REVENUE AGENCY
WRITTEN REPRESENTATIONS BY:
Mr. Richard Collins APPLICANT
Ifeanyi Nwachukwu FOR RESPONDENT
Marie-Eve Aubry
SOLICITORS OF RECORD:
Richard Collins APPLICANT on his own behalf
John H. Sims, Q.C. FOR RESPONDENT
Deputy Attorney General of Canada