[1] Mr. Fraser challenges a Tax Court judgment rendered under the informal procedure which dismissed his claim for a deduction for child support payments that he made in 1999 to the mother of his child: Fraser v. Canada, [2003] 1 C.T.C. 2563, 2004 D.T.C. 2154 (T.C.C.).

[2] Mr. Fraser and the child's mother have never been married to each other and have never cohabited with each other in a conjugal relationship. The child support payments were made pursuant to a maintenance agreement entered into on June 30, 1992 by Mr. Fraser and the child's mother. The maintenance agreement was made under section 6 of the Alberta Parentage and Maintenance Act, S.A. 1990, c. P-0.7. To meet the requirements of that provision, Mr. Fraser was required to acknowledge that he is the father of the child.

[3] Subsection 1(2) of the Alberta Maintenance Enforcement Act, S.A. 1985, c. M -0.5, reads in part as follows:

1(2) An agreement entered into under section 6 of the Parentage and Maintenance Act ... is deemed to be a maintenance order under this Act.

[4] On July 9, 1992, the maintenance agreement was filed with the Alberta Director of Maintenance Enforcement. On August 4, 1992, it was filed with the Court of Queen's Bench pursuant to subsection 12(1) of the Alberta Maintenance Enforcement Act, which reads in part as follows:

12(1) The Director ... may file with the Court of Queen's Bench a maintenance order that is not otherwise filed with the Court and, on being filed, the parts of the maintenance order that relate to maintenance are deemed to be a judgment of the Court of Queen's Bench.

[5] It is common ground that, for the purposes of the Alberta Maintenance Enforcement Act, the maintenance agreement became a judgment of the Court of Queen's Bench when it was filed with that Court, with the same legal effect as if it were a judgment made by that Court. It is also common ground that the Court of Queen's Bench is competent to make orders for the payment of child support in circumstances like those of Mr. Fraser.

[6] Mr. Fraser is permitted to deduct the child support payments in computing his income for income tax purposes only if the payments fall within the definition of paragraph (b) of the definition of "support amount" in paragraph 56.1(4) of the Income Tax Act, R.S.C. 1985 (5^th supp.), c. 1, the relevant parts of which read as follows (my emphasis):

"support amount" means an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and children of the recipient, if the recipient has discretion as to the use of the amount, and

. . .

(b) the payer is a natural parent of a child of the recipient and the amount is receivable under an order made by a competent tribunal in accordance with the laws of a province.

« _pension alimentaire_ » Montant payable ou à recevoir à titre d'allocation périodique pour subvenir aux besoins du bénéficiaire, d'enfants de celui-ci ou à la fois du bénéficiaire et de ces enfants, si le bénéficiaire peut utiliser le montant à sa discrétion et, selon le cas:

. . .

b) le payeur est le père naturel ou la mère naturelle d'un enfant du bénéficiaire et le montant est à recevoir aux termes de l'ordonnance d'un tribunal compétent rendue en conformité avec les lois d'une province.

[7] The only issue in this case is whether the maintenance agreement to which Mr. Fraser is a party became "an order made by a competent tribunal in accordance with the laws of a province" when it was filed with the Alberta Director of Income Maintenance and then the Court of Queen's Bench.

[8] The Tax Court Judge said it was not, and therefore the child support payments made by Mr. Fraser were not deductible. He reasoned that the deeming rules in subsection 1(2) and subsection 12(1) of Alberta's Maintenance Enforcement Agreement apply only for the purposes of that statute, and that they cannot apply for the purposes of paragraph (b) of the definition of "support amount" in subsection 56.1(4) of the Income Tax Act. I must respectfully disagree.

[9] The relevant part of the statutory definition of "support amount" in the Income Tax Act asks whether child support payments have been made under "an order made by a competent tribunal in accordance with the laws of a province". Parliament has thus indicated that the question of whether there is an order meeting that description is a matter of provincial law.

[10] Laws respecting child support are within the legislative authority of the provinces, as are the laws establishing the formalities for obtaining court orders for child support. In my view, the phrase "in accordance with the laws of a province" is broad enough to refer to all provincial laws regarding the legal obligation to pay child support, including the provincial laws governing the procedure by which such a legal obligation is made enforceable. The interpretation proposed by the Crown would limit those words in a manner that excludes some procedural aspects of the provincial law relating to child support. I see no justification for such a narrow interpretation.

[11] This is not a case where a provincial legislature has attempted to amend the Income Tax Act, or alter its effect, to meet some provincial objective that does not accord with the objectives of the Income Tax Act. On the contrary, the Legislature of Alberta has simply streamlined the procedure for obtaining court orders for child support so that a "deemed" judgment of the Court of Queen's Bench, as in this case, is the legal equivalent of an "actual" judgment made by that Court on consent. In practical terms, the only difference is that a consent order probably would require the expenditure of more time and money by the parties, and more judicial resources.

[12] The reasons stated above are sufficient to justify allowing this appeal. However, counsel for the Crown has urged this Court to deal with an alternative argument made in the Tax Court on the basis of section 34 of the Alberta Maintenance Enforcement Act (now repealed). At the relevant time, section 34 read as follows:

34. For the purposes of the Income Tax Act (Canada) a spouse includes a person who is required to make periodic payments in respect of maintenance under a written agreement or a maintenance order.

[13] Counsel for the Crown argued in the Tax Court and in this Court that this provision is ultra vires. Counsel for the Province of Alberta appeared in the Tax Court, and conceded that section 34 of the Alberta Maintenance Enforcement Act does not have the effect of amending the definition of "spouse" in the Income Tax Act, as it seems to do. The Province of Alberta did not appear in this appeal, although appropriate notice was given. Counsel for Mr. Fraser frankly conceded during his oral submissions in this Court that he could not defend the proposition that section 34 gives Mr. Fraser an alternative ground upon which he would be entitled to deduct child support payments. Thus, neither the Province of Alberta nor Mr. Fraser has any interest in arguing that section 34 of the Alberta Maintenance Enforcement Act is valid. As the resolution of that issue cannot affect the outcome of this case, I prefer to express no opinion on it.

[14] The judgment of the Tax Court should be set aside and replaced with a judgment allowing Mr. Fraser's income tax appeal and referring the matter back to the Minister for reassessment on the basis that the child support payments he made in 1999 are deductible. In accordance with the agreement of the parties, an order will be made requiring the Crown to pay the just and reasonable costs of Mr. Fraser.

"Karen R. Sharlow"

J.A.

"I agree"

M.E. Rothstein J.A.

"I agree"

B. Malone J.A.

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-655-02

STYLE OF CAUSE: ROBERT FRASER v. AGC

PLACE OF HEARING: EDMONTON, AB

DATE OF HEARING: MARCH 24, 2004

REASONS FOR JUDGMENT: SHARLOW J.A.

CONCURRED IN BY: ROTHSTEIN J.A.

MALONE J.A.

DATED: MARCH 25, 2004

APPEARANCES:

Mr. Carman McNary

FOR THE APPLICANT

Ms. Margaret Irving

FOR THE RESPONDENT

SOLICITORS OF RECORD:

Fraser Milner Casgrain - Edmonton, AB

FOR THE APPLICANT

Morris Rosenberg,

Deputy Attorney General of Canada - Ottawa, ON

FOR THE RESPONDENT

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