Canada allowed its legislative body the power of taxation more broadly, and more readily, than its neighbour to the south.
From the moment of Confederation, the authority of the Parliament has extended to “the raising of money by any mode or system of taxation”Constitution Act, 1867, s. 91(3). That authority has been exercised to tax personal income since the First World WarIncome War Tax Act, 1917.
Still, the tax law of Canada has not been immune to constitutional challenge.
Occasionally an aggrieved citizen will assert that taxation infringes their “freedom of conscience and religion” under the Canadian Charter of Rights and Freedomss. 2(a), Part I of the Constitution Act, 1982 when the government spends its tax revenue on abortionsNorejko v. The Queen, 2004 TCC 829; R. v. Little, 2009 NBCA 53, or the militaryPetrini v. Canada,  1 CTC 200 (FCA); Prior v. Canada,  2 CTC 280 (FCA). The courts invariably make short work of these claims, as in Petrini:
“The simple, if subjectively unpleasant, obligation to pay taxes to a government some or all of whose views and programs one opposes does not imply support of such views and programs or force the taxpayer to act contrary to his or her personal beliefs and convictions; on the contrary, it is an essential part of living in a democracy such as Canada.”Little, para. 16 (quoting Petrini)
More difficult questions are raised in allegations that specific provisions of tax law are discriminatory within the meaning of Charter section 15, which guarantees “equal protection and equal benefit of the law… without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability”s. 15(1).
The most notable example is Symes v. Canada (1993), where a woman claimed that her inability to deduct the wages of her nanny as business expenses necessary to the production of income in her career as a lawyer amounted to sex-based discrimination barred by the Charter, and came within a hair’s breadth of victorySymes v. Canada,  4 SCR 695,  1 CTC 40.
Before asking whether the Income Tax Act offended the Charter, the courts had to decide whether the Act actually allowed the deduction—in itself a subtle question of statutory construction that I will leave to a future post. The bottom line is that the Supreme Court overruled the trial judge by holding that the Act unambiguously denied the deductionSymes, 751 (“child care cannot be considered deductible under principles of income tax law applicable to business deductions”), even “using the values of the Charter as an interpretive aid”Symes, 751 (posing the question) and 752 (answering it: “s. 63 [of the Income Tax Act] eliminates any question of ambiguity, and by so doing, also eliminates the need for recourse to Charter values … Continue reading. But it agreed with precedentSymes, 751, quoting Hills v. Canada,  1 SCR 513, 558 (“the values embodied in the Charter must be given preference over an interpretation which would run contrary to them”) that those values could have been used to resolve ambiguity in the statute, had there been any.
The Court further allowed each of the following points cutting in favour of the taxpayer:
- The Act is not insulated from Charter review, and no deference to legislature is appropriate in the s. 15 analysisSymes, 753. If the Court were persuaded that a tax statute infringed the right to equality, the statute would be abrogated.
- Section 15 comprehends “adverse effect discrimination”. A law that is “on its face neutral” but “has a discriminatory effect upon a prohibited ground” still runs afoul of the CharterSymes, 755-756, quoting Ont. Human Rights Comm. v. Simpsons-Sears,  2 SCR 536.
- The tax law “creates a facial distinction between those supporting persons who incur child care expenses with respect to an eligible child, and those persons who do not”Symes, 762.
- The evidence “conclusively demonstrates that women bear a disproportionate share of the child care burden in Canada”Symes, 762.
The failure of the evidentiary record to bridge the gulf between disproportionate burden of child care and disproportionate payment of child care expenses seems to be all that stood in the way of Ms. Symes prevailingSymes, 765 (“Unfortunately, proof that women pay social costs is not sufficient proof that women pay child care expenses.”). The majority opinion even suggests that “a different subgroup of women with a different evidentiary focus involving s. 63 might well be able to demonstrate the adverse effects required by s. 15(1)”Symes, 766.
The two female judges dissentedSymes, 822 (“The goal and the requirement of equality, as set out by s. 15 of the Charter, makes it unacceptable that Ms. Symes be denied [the deduction]”).
The evolving jurisprudence on s. 15 continues to emphasize a “substantive contextual approach”Withler v. Canada (Attorney General), 2011 SCC 12, para. 43 and the basic framework created in Andrews v. Law Society of British Columbia (1989) 1 SCR 143; cited in Withler, para. 29 which informed the analysis in SymesSymes, 754–757.
But Grenon v. Canada (2016)2016 FCA 4 shows how slippery the inference of adverse effect can be. The payors of child support in divorce settlements are overwhelmingly male92.8%, on the evidence submitted (Grenon, para. 16), but the court saw no substantive discrimination in denying them a deduction for legal costs:
“To establish a section 15 violation… [t]he law… must have a qualitatively different impact on men. A mere numerical imbalance will not suffice.
The Charter argument fails because it confounds the underlying social circumstances with the consequences of the law. Assume, for example, a special tax on the highest earning 1% of income earners in Canadian society. Such a tax may fall disproportionately on men, but that does not mean that men are subject to differential treatment within the meaning of section 15.
Put otherwise, the section 15 analysis requires that there be a qualitative nexus between the law and the group.”Grenon, para. 41–45
This reasoning is not easily reconciled with Symes, where the majority suggests that they would have been satisfied with a “mere numerical imbalance” (as Grenon calls it) in the payors of child care expenses. Grenon acknowledges the relevance of adverse effect to the inquiry, but its “qualitative nexus” requirement seems ultimately to draw a line much closer to facial discrimination.
In a social climate increasingly focused on the advancement of marginalized groups, it does not seem beyond the realm of possibility that a Charter equality rights challenge to a tax law provision could succeed today. Equality remains “an elusive concept”Andrews, at 164 with which the courts will undoubtedly continue to grapple.
|↑1||Constitution Act, 1867, s. 91(3)|
|↑2||Income War Tax Act, 1917|
|↑3||s. 2(a), Part I of the Constitution Act, 1982|
|↑4||Norejko v. The Queen, 2004 TCC 829; R. v. Little, 2009 NBCA 53|
|↑5||Petrini v. Canada,  1 CTC 200 (FCA); Prior v. Canada,  2 CTC 280 (FCA)|
|↑6||Little, para. 16 (quoting Petrini)|
|↑8||Symes v. Canada,  4 SCR 695,  1 CTC 40|
|↑9||Symes, 751 (“child care cannot be considered deductible under principles of income tax law applicable to business deductions”)|
|↑10||Symes, 751 (posing the question) and 752 (answering it: “s. 63 [of the Income Tax Act] eliminates any question of ambiguity, and by so doing, also eliminates the need for recourse to Charter values in this case”)|
|↑11||Symes, 751, quoting Hills v. Canada,  1 SCR 513, 558 (“the values embodied in the Charter must be given preference over an interpretation which would run contrary to them”)|
|↑13||Symes, 755-756, quoting Ont. Human Rights Comm. v. Simpsons-Sears,  2 SCR 536|
|↑16||Symes, 765 (“Unfortunately, proof that women pay social costs is not sufficient proof that women pay child care expenses.”)|
|↑18||Symes, 822 (“The goal and the requirement of equality, as set out by s. 15 of the Charter, makes it unacceptable that Ms. Symes be denied [the deduction]”)|
|↑19||Withler v. Canada (Attorney General), 2011 SCC 12, para. 43|
|↑20|| 1 SCR 143; cited in Withler, para. 29|
|↑22||2016 FCA 4|
|↑23||92.8%, on the evidence submitted (Grenon, para. 16)|
|↑24||Grenon, para. 41–45|
|↑25||Andrews, at 164|