http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/108241/index.do
Corkum v. The Queen (February 23, 2015 – 2015 TCC 38, Rossiter CJ).
Précis: This decision concerned the appellant’s entitlement to Canadian Child Tax Benefit, the National Child Benefit Supplement and the Goods and Services Tax Credit for the 2009, 2010 and 2011 base taxation years. The appellant accompanied her husband to Egypt in 2001 and lived there continuously until she returned to Canada in October of 2013. Apart from some furniture stored with her sister she had no connections with Canada between 2001 and 2013. The Court held that she was not a resident of Canada during the 2009, 2010 or 2011 taxation years.
Decision: The facts of this decision are very simple and very unfavourable for the taxpayer:
[4] The Appellant was married to a Dr. Khalid Abaza. She left Canada in 2001 to be with her husband as he was pursuing a Ph.D. in Oceanography and Fisheries at the Institution in Egypt, as well as working as a lecturer assistant at the Institution a position which he had accepted prior to leaving Canada. The only possessions taken with her to Egypt at the time were her personal clothing. Any furnishings she had were stored in her sister’s basement in Canada at no charge.
[5] The Appellant lived in Egypt with her husband for twelve years, 2001 to 2013. Her first child was two years old when they went to Egypt and had been born in Egypt. Her second child had just been born prior to leaving Canada and her third child was born in Egypt. On the application of her husband, the Appellant had an Egyptian visa which entitled her to stay in Egypt from one to three years and was renewed. She received the CCTB, NCBS and GSTC benefits for a period of nine years.
[6] The CCTB, NCBS and GSTC benefits were automatically deposited into the Appellant’s bank account. She only accessed her bank account through the internet, never accessing her account through ATM machines. At all times she used only Egyptian currency, never using credit cards. Her husband controlled all financial matters and family money. The husband also controlled all external aspects of their life, including basic shopping. He made all decisions in all matters, including education and health issues. Apparently it is part of the Muslim religion that these decisions be made by the head of the household which is the husband. Entertainment was little if anything, except for if they would go for a walk in the park, or they might take the children for ice cream. The Appellant could not take the children out by herself without her husband. If visitors came from Canada, the Appellant might show them around the neighbourhood. The Appellant learned how the Egyptian society operated, speaking some Arabic, but she cannot read or write Arabic. She had only some passing acquaintances in Egypt, mostly people who were parents of friends of her children. She is a Muslim and practiced the Muslim faith since 1991 and as such, would not normally come and go to the mosque with her husband. She had very little interaction with others. During what she described as the troubles, in 2009 and 2010, the Appellant lived with her in‑laws for security purposes as she did not feel safe.
[7] The Appellant and her family lived like a typical Egyptian family in an apartment which was much like any apartment in Canada. The Appellant acted as a housewife doing the cleaning, dishes and the laundry. She had no intention to work in Egypt, her children were small, and she did not want to work, she wanted to care for her children and also, she did not have a work visa for Egypt. She was entitled to become an Egyptian citizen because her husband had Egyptian citizenship but she never did. If she had become a citizen, she could have worked, voted, and received medical coverage but it was her decision not become a citizen of Egypt. She did not pay Egyptian taxes and was only in Egypt to accommodate her husband’s schooling and teaching.
[8] The Appellant did have some emails and communications with a friend in Ottawa and a friend in Nova Scotia, in 2009, for the purpose of job prospects for her husband.
[9] According to the Appellant, there was political unrest in Egypt in 2009 and 2010 and troubles flared up again in 2013 and the return of turmoil was part of her decision to return to Canada. She asserted it was very difficult to get the paperwork to return to Canada.
[10] The Appellant’s husband finished the defence of his Ph.D. in 2004 and he received his Ph.D. in 2005. He had his credentials assessed in Canada, and all his degrees were found to be equivalent to degrees in Canada. This credential assessment was apparently a requirement to obtain a job in Canada. The husband made inquiries with respect to employment in Canada, looked at franchise opportunities and jobs, obtained appropriate letters of recommendation, and the appropriate certified copies of his Ph.D. certificate. He felt that at the end of 2010 there was no way they could stay in Egypt and that he had to renew the passports needed for his wife and children. The Appellant’s husband asserted he was intending to leaving Egypt sooner rather than later. One of his children had ADD, which necessitated her to be exempted from certain school subjects to accommodate her disability, but because of this she would be barred from registering in university education in Egypt.
[11] The Appellant’s husband was an assistant lecturer at the Institution from 2001 to 2005 and a full time lecturer from 2005 to 2013. Post his Ph.D. in 2005, the husband continued to work at the Institution and became involved in a multi year project which qualified as post doctoral experience until 2013. The husband concluded that they would stay in Egypt unless he got a job in Canada.
The appeal only presented one issue:
[12] Was the Appellant a resident for the purpose of the CCTB, the NCBS and GSTC for the 2009, 2010, 2011 base taxation years? (The credits, CCTB, NCBS and GSTC require that the taxpayer be a resident in Canada during the periods for which the credits are claimed.)
The Tax Court concluded that there had been no settled intention to return to Canada during the years in question and dismissed the taxpayer`s appeal:
[23] There had been an expressed intention to return upon completion of the Ph.D. That was several years before the base taxation years and it never occurred. There was no travel to Canada in the meantime.
[24] It is evident to me that the reason for the long term stay in Egypt was that they had become settled to the way of life in Egypt. This was where her husband received his education and once he received his education, for years thereafter from 2005 through 2013, he remained employed full-time in Egypt. Her children were raised in Egypt in the customary Egyptian society ways and her children received their education in Egypt. It was quite evident to me that their long-term commitment was to Egypt. The children were raised there and in fact two of the children were born in Egypt, and the one born in Canada was almost two years of age when they moved to Egypt.
[25] I believe the intention of the Appellant can only be discerned from the facts which are presented before the Court. If the intention of the Appellant was to return to Canada, I see little basis for this and most certainly, the intention to return to Canada was not present during the latter years of their stay in Egypt after the Appellant’s husband had obtained his Ph.D. in 2005. His education was purportedly the reason they were living in Egypt in the first place. Once he received his Ph.D. it was hardly a sojourn. It appears that there was a haphazard attempt to look for some employment in Canada, but it takes more than these efforts in my mind to establish residency and an intent required to be a resident of Canada for the relevant period of time. It is my view that the meaningful relationships and trappings of the daily life of the Appellant in Egypt were so strong over such a long period of time, that the Appellant’s ordinary and primary residence was in Egypt and most certainly not Canada. The appeal is dismissed.