Monday, 2 February 2009

Residence: a word with too many meanings for Expats

`When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.'

`The question is,' said Alice, `whether you can make words mean so many different things.'

`The question is,' said Humpty Dumpty, `which is to be master -- that's all.'

Lewis Carroll, Through the Looking Glass

Perhaps Lewis Carroll anticipated the problems of expats and the use of the word "resident" when he wrote these immortal lines. It is easy to empathize with Alice as she struggles to make sense of Humpty D's arbitrary use of language and his haughty motive of controlling her.

The word resident is fraught with many meanings as it is used by bureaucracies and applied to us ordinary Alices. Imagine Alice's problem compounded by two (or more!) countries using the same word with different meanings that have real effect on things like taxation, health care, driving, social benefits, employment, immigration, marriage, children, estates, trusts and on and on. Arrgghh!

For the benefit of other expats like me, today's post addresses the issue with respect to one country - Canada, and one province within it - Ontario. Other provinces will have similar but, of course, not identical rules and interpretations.

Residence in everyday use means something like "live in a place", which is fine until governments mould the idea to fit who they want to include or exclude. We end up with details that are drastically different, almost turning the words inside out. Whereas in Humpty's mouth the motive of control seems harsh in its explicitness and brashness, in government hands the same justification becomes one of the "necessity to attain policy aims" or some such euphemism. The end result for common folk is unfairness and confusion.

The Many Meanings of Residence in Ontario Canada
The charts below show what I have found out to be the different rules and tests for what constitutes "residence", used loosely where various types of government and some private organisations apply the concept of living somewhere. Note that some of these could be wrong despite my best efforts and showing of original sources. I'm not a lawyer and these things are so darn complex, you should double check before taking any action.


Most of the definitions sort of overlap but the details are devilish and each definition has its nuances. There seems to be a significant divide between those relying on physical presence (of varying amounts of time) as the main criteria, and the tax people who rely on ties to the country.

It is amusing to read that Elections Canada claims that a person can have only one ordinary residence at a time. In the tax world and amongst different countries that's not true. Don't know if English law is similar enough to Canadian law but this UK reference says "it is well established that it is possible to be ordinarily resident in more than one country at the same time." (PM North and JJ Fawcett, Private International Law, 13th edition, 1999, page 170 and footnotes a dozen cases as proof).

The result of the divergent rules, for instance, is that it is easy to end up paying all federal and provincial taxes, including Ontario's health premiums, on worldwide income, some of which may not even have been earned in Canada, and yet be ineligible for Ontario health care. Who knows if you will be eligible in the foreign country or if it even offers health care. Is that fair?

Legal scholars North and Fawcett (page 139) make another statement: "Problems in relation to residence would disappear if this concept were to be replaced by the simpler concept of presence." But apparently this has been rejected in the UK and in every other country too. Instead, governments and courts have, over decades of law-making, regulation-making and jurisprudence, on the principle of taking into account the social and economic requirements of a situation, created a sophist's delight that requires 1000 page books (that's how long their book is) to explain the simplified version of reality, leaving the ordinary person in a confusingly impossible state.

It would be completely understandable if many were not so kind-hearted as Alice, who realized Humpty D's precarious sitting spot and worried that he might fall off his perch.

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