As noted in an earlier post on the Bower case, Canada spent about $4 billion in 2011-2012 on the refundable GST credit and about $10 billion on the Child Tax Benefit. This may explain why the rules are complex and the CRA is strict. Obviously, Canada can only afford to give these credits to its own residents. (See the tables in the Department of Finance’s Tax Expenditures and Evaluations 2012.)
Ms. Kwangwari claimed the CCTB for her children, one of whom was born in Zimbabwe, one in Canada. For the years in appeal, neither she nor her husband was a Canadian citizen, a permanent or temporary resident, or a protected person under Canada’s immigration laws. CRA’s records showed that Ms. Kwangwari had filed the CTB application claiming that her husband was a Canadian citizen; he was not. (Para. 6) Based on that wrong information, CRA issued CCTB payments, which it now reclaimed.
Ms. Kwangwari said that she had not claimed that her husband was a Canadian citizen and CRA should have asked her for proof. CRA only had an electronic record of the application; so it could not prove that the citizenship claim was Ms. Kwangwari’s deliberate entry or a CRA processing error. But it did not matter to Justice Lamarre who was at fault; the law is clear. Ms. Kwangwari did not qualify for the credits; she must repay them. (Para. 10)
Justice Lamarre recommended a remission order as a possible remedy for Ms. Kwangwari. (Para. 11) If granted by the Federal Cabinet, remission orders release a tax debtor from paying the tax, interest or penalty “remitted”. But it seems unlikely CRA will aid Ms. Kwangwari this way, as CRA clearly thinks she lied on her application form.
Justice Lamarre also referred to the Taxpayer’s Ombudsman’s 2010 Special Report, Proving Your Status: Establishing Eligibility for the Canada Child Tax Benefit, which has recommendations “to make it easier for taxpayers to understand the CCTB eligibility requirements, including the types of
supporting documentation that may be required to prove status.” (See p. 15 of the Report.)