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HeyReprotech is on hiatus, but here's an update on a story from earlier this year...
In March, I wrote a story called "There's a tax break for adoption but not surrogacy — is that fair?" It was about a couple who had used surrogacy to have their two children. They were arguing before the Tax Court of Canada that it was a violation of their charter rights that a family building itself through adoption could write off expenses such as agency fees, legal fees and travel costs, but a family building itself through surrogacy could not.
On December 2, the Tax Court of Canada dismissed the challenge.
Here are some key bits:
The couple had to show two things: that there was evidence that a parent through surrogacy is "a member of a distinct group whose members have suffered disadvantages in establishing and formalizing their parent/child relationships" and, if that's true, that exclusion of surrogacy-related expenses from the adoption tax credit perpetuates or exacerbates those disadvantages.
"While the Appellant’s counsel has in her oral and written submissions provided a brief overview of how surrogate parents are treated differently than adoptive parents under provincial law, she has not provided me with much to consider as to the historical, political and legal context in which such distinctions have been made. In fact, the evidentiary record is particularly non-existent on these points. Therefore, I am of the opinion that it has not been established that the Appellant’s claim is justified based on analogous grounds for the purpose of subsection 15(1) of the Charter. This is sufficient for me to dismiss the Appellant’s appeal."
"If I am wrong on this first point, I believe that the Appellant’s claim also fails because limiting the [adoption tax credit] to adoption-related expenses does not perpetuate or exacerbate any preexisting disadvantage or prejudice within the meaning of section 15 of the Charter."
"The [Income Tax Act] provides for numerous tax incentives that are meant to encourage actions or activities that Parliament wishes to encourage because such actions or activities are perceived to be of social good or beneficial to society as a whole. This is particularly true for tax credits that are tailored to cover expenses incurred in connection with the type of actions or activities that Parliament seeks to promote. Tax credits incentivize activities or actions undertaken by taxpayers by focusing on expenses that they incur in connection therewith. Expenses that are not incurred for the favoured objective are excluded because they are inconsistent with the specific purpose of the incentive."
"The [adoption tax credit] was tailored to cover adoption expenses because Parliament simply wanted to encourage domestic and international adoptions in the interest of vulnerable children."
"It is common knowledge that vulnerable children are placed for adoption in situations where proper parental care is impossible. Having faced many disadvantages in this regard, children placed for adoption may remain in public care for long periods. This exacerbates their ability to build meaningful emotional attachments. Simply put, children placed for adoption are disadvantaged by their condition. Children born under surrogacy arrangements do not face similar hardships. They have parents waiting for them from conception and join a family upon birth."
HeyReprotech is on hiatus until mid-January.