## Facts

- Tom Cheek was a United States resident and a well-known baseball radio commentator.
- Cheek travelled to Canada to attend and broadcast on radio a description of Toronto Blue Jays home games.
- For the 1993, 1994, 1995, and 1996 tax years, Cheek reported amounts earned in Canada from his radio broadcasts on his Canadian returns.
- Cheek then deducted those same reported amounts, taking the position that they were exempt from Canadian tax under a provision of the Canada–United States Tax Convention.
- The Minister of National Revenue disallowed the deductions claimed for the treaty-based exemption.
- Cheek appealed the reassessments to the Tax Court of Canada.

## Issues

1. Whether the Canada–United States Tax Convention exempted Cheek’s Canadian-source broadcasting income from Canadian tax for 1993–1996.
2. If the treaty exemption did not apply, whether Cheek was entitled to deduct the Canadian broadcasting income amounts he had reported on his Canadian returns.
3. Whether the Minister properly disallowed the deductions and reassessed Cheek to include the Canadian broadcasting income in taxable income earned in Canada.

## Decision

- The Tax Court dismissed Cheek’s appeal.
- The court upheld the Minister’s disallowance of the deductions claimed on the basis that the treaty provision relied on did not exempt the income on these facts.
- As a result, Cheek’s income earned in Canada from broadcasting Blue Jays home games remained taxable in Canada for the years at issue.

## Legal Principles

- A non-resident who performs services in Canada may be taxable in Canada on the resulting Canadian-source income unless a tax treaty limits Canada’s taxing right.
- A taxpayer claiming treaty relief bears the burden of showing that the treaty provision applies to the particular income and circumstances.
- A tax treaty limits domestic taxing rules only to the extent its terms do so; it does not create a deduction or exclusion by implication.
- Deductions are available only where authorized under Canadian tax law; a taxpayer cannot remove otherwise taxable Canadian-source income by claiming a deduction based solely on an asserted treaty exemption that is not established.
- Treaty interpretation starts with the text read in light of the treaty’s object and purpose, including the allocation of taxing rights and the avoidance of double taxation.

## Conclusion

Cheek, a U.S.-resident baseball radio commentator who travelled to Canada to broadcast Toronto Blue Jays home games, reported his Canadian broadcasting income for 1993–1996 but then deducted the same amounts as treaty-exempt. The Tax Court of Canada rejected that position, upheld the Minister’s disallowance of the deductions, and dismissed the appeal, leaving the Canadian-source broadcasting income taxable in Canada.


Cheek and Her Majesty the Queen, Case No. 1999-1113(IT)G (2002)