Huet v. Canada
T-834-90
Noël J.
30/6/94
18 pp.
Appeal by way of trial de novo from assessments for plaintiff's 1981, 1982, 1983, 1984 and 1985 taxation years-Taxpayer fisherman in Gaspé who sold fishing boat in January 1981 and decided to place proceeds of sale in term deposits-Purchased income-averaging annuity contract from La Sauvegarde life insurance company but decided to wait until early 1982 before signing final agreement-On November 12, 1981, Minister of Finance announced in House of Commons that he was eliminating tax deferrals through income-averaging annuities and capital gains reserves-One month later, he announced that he would permit the deduction of contracts for which written arrangements had been made before November 12, 1981-Despite budget announcement, plaintiff purchased annuity at beginning of 1982 and deducted purchase price in 1981 taxation year-Minister of National Revenue disallowed deduction of purchase price of annuity for 1981 taxation year and adjusted income reported by plaintiff for 1982, 1983, 1984 and 1985 taxation years accordingly-No doubt as to power of Parliament of Canada to impose retrospective fiscal measures-Since decision in Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271, Canadian courts have confirmed legality of such measures on several occasions-In Air Canada v. British Columbia, [1989] 1 S.C.R. 1161, Supreme Court of Canada held that Legislature could make taxing statute that was ultra vires valid retroactively-Courts have faithfully followed pronouncements of Supreme Court in Gustavson and Air Canada, despite coming into force of Canadian Charter of Rights and Freedoms-Since Attorney General of Quebec v. Irwin Toy Limited, [1989] 1 S.C.R. 927, clearly established section 7 does not protect economic rights generally covered by concept of property, which are in issue in tax cases-Argument based on Canadian Bill of Rights, s. 1(a) must also be rejected-Retrospective taxing statute does not give rise to breach of due process of law, within meaning, a contrario, of Bill of Rights, s. 1(a)-Plaintiff's argument based on rule of law implies that laws are guarantors of rights and freedoms and must at all times determine everyone's rights and obligations-It is budget process that creates uncertainty as to what applicable law is-This process has practical effect of creating legal vacuum and can seriously undermine rule of law, particularly when accompanied by long waiting period-However, doubtful that Charter permits courts to interfere in budget process-Budget process and manner in which it unfolds in Parliament therefore falls within framework of parliamentary privileges-These privileges grounded in Constitution only where necessary for Parliament to carry out its activities-Plaintiff argues sixteen months between budget statement and enactment of legislation giving effect thereto excessive and going well beyond time needed for proper functioning of House-Even if serious infringement of principle of rule of law, it could not give courts authority to interfere in parliamentary process-Issue here mode of exercise of valid privilege beyond judicial review-Appeal dismissed-Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act, 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, no. 44], s. 7-Canadian Bill of Rights, R.S.C., 1985, Appendix III, s. 1(a).