What the Income Tax Act Can Teach Us About Homophobia in Canada

Tax law demands attention to detail. This post explains how certain details in Canada's Income Tax Act subtly discriminate against LGBTQ+ communities and posits that these details – however small – are worthy of our attention.

A phobia is typically characterized by “[m]arked fear or anxiety” regarding some specific thing.1 Some phobias are specifically recognized in the Diagnostic and Statistical Manual of Mental Disorders (“DSM-V”), whereas other phobias, such as homophobia, are not. Notwithstanding its omission from the DSM-V, homophobia is defined in the Canadian Oxford Dictionary in a familiar manner: it is “a hatred or fear of or prejudice against homosexuals or homosexuality.”2

Homophobia,3 however, has a more nuanced meaning than is suggested by its dictionary definition or than would be captured by a DSM-V definition. Homophobia has a social dimension extending beyond any one individual. It means more than the overt and unapologetic hatred of homosexuals that is almost universally abhorred by the general public. There are more subtle forms of homophobia, sometimes referred to as microaggressions.4

Microaggressions may be defined as “[b]rief and commonplace daily verbal, behavioural, or environmental indignities, whether intentional or unintentional that communicate hostile, derogatory, or negative slights and insults toward members of oppressed groups.”5 Microaggressions can be systemic in nature, comprising of subtle forms of discrimination perpetrated through government or education systems.6 With this definition in mind, we can turn our attention to an example of a systemic microaggression that has been codified in Canada’s Income Tax Act.7

When we read the provisions defining “brother” and “sister” in the ITA, assuming the individuals being referenced are all engaged in heterosexual relationships, the Act has the effect of incorporating brothers and sisters-in-law into the definitions of brother and sister, respectively, and no problems arise. However, if we read the same provisions with reference to people in homosexual relationships, we end up with strange, asymmetrical results.

The definition of “sister” is located at s. 252(2)(c) of the ITA and reads as follows:

(c) a sister of a taxpayer include[s] a person who is

(i) the sister of the taxpayer’s spouse or common-law partner, or

(ii) the spouse or common-law partner of the taxpayer’s brother.8

Notably absent from this definition is mention of, to mirror the language of the Act, the spouse or common-law partner of the taxpayer’s sister. That possibility is not considered in the provision. If I am the taxpayer, and my sister marries a woman, that woman would not be my sister for the purposes of the Act. Paradoxically, I could still be my sister’s wife’s brother. At subsection 252(2)(b) of the ITA, a “brother” is defined as the following:

(b) a brother of a taxpayer include[s] a person who is

(i) the brother of the taxpayer’s spouse or common-law partner, or

(ii) the spouse or common-law partner of the taxpayer’s sister.9

If my sister’s wife is the taxpayer, I would be her brother pursuant to s. 252(2)(b)(i).

What is the practical effect of all this? From a tax standpoint it seems the effect is negligible, if it has any effect at all. For example, ITA provisions that refer to a taxpayer’s “sister” tend also to refer to the taxpayer’s “brother” and to a relational connection “of the individual or of the individual’s spouse or common-law partner.”10 In effect, the tax consequences of my sister’s wife not being my sister are wiped out because I am the brother of my sister.

Elsewhere, where language with this effect is not included in the provision itself, there is mitigating language included in other provisions. For example, the tests in the ITA for determining whether corporations are associated rely on the relatedness of individuals to each other.11 Since I would be my sister’s wife’s brother but she could not be my sister, some uncertainty might arise as to whether, if we both owned twenty-five per cent or more of the capital stock of different corporations, those corporations would be related—an important issue that could impact the tax treatment of those corporations. Since my sister’s wife could not be my sister, we would not meet the test for relatedness as brother and sister, despite the apparent intention of the Act to catch analogous relationships stemming from heterosexual marriages or partnerships. If my sister married a man, that man would be my brother pursuant to s. 252(2)(b)(ii).12 Happily,13 in this case discrimination based on sexual orientation is avoided by the operation of s. 251(6)(b),14 where the Act deems my sister’s wife and I to be related by marriage. My purpose here is not to provide a comprehensive picture of the effect of the definitional asymmetries. It is simply to point out that these examples seem to have little practical significance as far as taxation is concerned.15

The more important point I am trying to make is that the ITA contains a codified assumption that people will engage in heterosexual relationships. This assumption serves no apparent purpose, other than to show LGBTQ communities that as far as Canada’s tax legislation is concerned, my sister’s wife cannot be, by definition, my sister. And who wouldn’t want to be my sister? I’m great.16

I want to make clear that my intention with this comment is not to insinuate that Parliament is filled with homophobes who are willfully codifying discriminatory assumptions in the Income Tax Act or elsewhere. In fact, the federal government has very recently been active in working on issues of gendered discrimination in the budgetary context specifically.17 My purpose is to offer an example of unintended systemic microaggression. The definitions of brother and sister discussed above represent a minute and seemingly inconsequential point from a tax perspective. However, from a human perspective, they serve as a reminder to LGBTQ communities that when Parliament drafts legislation—even legislation as fundamental as the ITA—the drafters do not always keep in mind the possibility of non-heterosexual relationships. When the statutory definitions of “brother” and “sister” were drafted, the legislators just weren’t thinking about it.

We should be thinking about it. I think it is incumbent on Parliament and Canadians generally to pay attention to the minutiae, because its overall effect is greater than the sum of its parts. We should get rid of these legislative artifacts from a less-enlightened time, because it is worth sending the message that, as a country, we think a commitment to equality includes a commitment to sweating the small stuff. Amending the definitions of brother and sister in the ITA is one example of a little big thing we can do in the name of sending that message.


* BBA (University of Regina), JD Candidate (University of Saskatchewan). 

1 American Psychiatric Association, Diagnostic and Statistical Manual of Mental Disorders, 5th ed (Arlington: American Psychiatric Association, 2013) at 197 [DSM-V].

2 2nd ed, sub verbo “homophobia”.

3 I acknowledge that in addition to concerns about homophobia, there are pervasive issues of transphobia in the federal Income Tax Act (RSC 1985, c 1 (5th Supp) [ITA]), largely owing to the gendered language used throughout. The treatment of the issue in this comment is limited to a very specific instance of homophobia, but broader problems clearly exist and are equally deserving of attention.

4 Thinking in terms of “aggressions” can be a conceptual challenge for those who, like me, are in the habit of associating aggression with malice. It is important to accept the term “microaggressions” as it has been defined by LGBTQ communities and other scholarship studying traditionally marginalized groups (see e.g. Chester M Pierce et al, “An Experiment in Racism: TV Commercials” (1977) 10:1 Education and Urban Society 61 at 62). The term is intended to describe the experiences of those groups, and it is incumbent on allies of those communities and conscientious individuals generally to make an effort to understand those communities’ experiences as they describe them. I have my sister, Emily, to thank for her persistence and patience in helping me understand this.

5 Kevin L Nadal, That’s So Gay!: Microaggressions and the Lesbian, Gay, Bisexual, and Transgender Community (Washington, DC: American Psychological Association, 2013) at 36.

6 Ibid at 79.

7 ITAsupra note 3.

8 Ibid.

9 Ibid

10 See e.g. ibid, s 118(1)(c.1)(ii)(B).

11 Ibid, s 256(1).

12 Ibid.

13 Or unhappily, if your intention is to take multiple small business deductions by tax planning with your sister’s wife.

14 ITAsupra note 3.

15 I have omitted discussion of any Charter issues that might arise. Suffice to say that the ITA distinguishes between heterosexual and homosexual people in the sections I have discussed. Since sexual orientation has been recognized as deserving of s. 15 protection (Vriend v Alberta, [1998] 1 SCR 493 at para 90, 156 DLR (4th) 385), the provisions may be open to challenge. Perhaps, given the seeming legal insignificance of the definitions of “brother” and “sister,” it could ground a straightforward, purely doctrinal reference question that would force the Supreme Court to clean up its s. 15 jurisprudence (see Quebec (Attorney General) v A., 2013 SCC 5, [2013] 1 SCR 61).

16 With apologies to my friends and family who know better, and graciously tolerate me.

17 See e.g. Janyce McGregor, “Liberals’ 1st gender-sensitive budget identifies gaps, funds possible fixes”, CBC News (22 March 2017), online: <http://www.cbc.ca/news/politics/liberal-budget-2017-gender-1.4035214>, archived: <https://perma.cc/Y8Z8-85CA>.