2015-0580471E5 Resident in a province

Principal Issues: 1. What is the meaning of the word "Canada" as used in the Act? 2. Can a taxpayer be resident in Canada and in a province at the same time? 3. Is a person working in the private sector liable to tax in the province and in Canada?

Position: 1. "Canada" is defined in the Act. 2. A taxpayer is generally factually resident in Canada and in a province concurrently. 3. Every person resident in Canada at any time in a taxation year shall pay an income tax on their taxable income for each taxation year,.

Reasons: 1. N/A 2. The Act and provincial legislation 3. S. 2(1) of the Act.

Author: Skulski, Katharine
Section: 2(1), 255, subsection 35(1) of the Interpretation Act

XXXXXXXXXX
                                                      Katharine Skulski
                                                      2015-058047

May 22, 2015

Dear XXXXXXXXXX:

Re:  Residency

We are writing in response to your letter dated March 30, 2015 in which you sought clarification of the meaning of the word “Canada” as used in the Income Tax Act (the “Act”).  You also asked for our comments on whether a taxpayer can be resident in Canada and in a province at the same time and whether a person working in the private sector is liable to tax in the province and in Canada.

Our comments

This technical interpretation provides general comments about the provisions of the Income Tax Act and related legislation (where referenced).  It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination.  The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R5, Advance Income Tax Rulings.

The term “Canada” is defined in section 255 of the Act as:

For the purposes of this Act, "Canada" is hereby declared to include and to have always included

(a)   the sea bed and subsoil of the submarine areas adjacent to the coasts of Canada in respect of which the Government of Canada or of a province grants a right, licence or privilege to explore for, drill for or take any minerals, petroleum, natural gas or any related hydrocarbons; and
(b)   the seas and airspace above the submarine areas referred to in paragraph (a) in respect of any activities carried on in connection with the exploration for or exploitation of the minerals, petroleum, natural gas or hydrocarbons referred to in that paragraph.

The term province is defined in section 35(1) of the Interpretation Act as meaning “a province of Canada, and includes Yukon, the Northwest Territories and Nunavut.”

Generally, a taxpayer who is factually resident in Canada will also be factually resident in a province concurrently.  The Canada Revenue Agency’s (CRA) Folio S5-F1-C1, Determining an Individual’s Residence Status provides information on determining an individual’s residence.  In particular, paragraphs 1.2 – 1.4 provide comments regarding residence in a province.

It is the CRA’s longstanding position that every person resident in Canada at any time in a taxation year shall pay an income tax on their taxable income for each taxation year, as required by the Act.  This is also supported by subsection 2(1) of the Act. Please find enclosed a severed copy of a letter recently issued on this subject (CRA document 2014-054764).                    

We trust that these comments will be of assistance.

Yours truly,

Terry Young, CPA, CA
Manager, Administrative Law Section
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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