REASONS
FOR JUDGMENT
C. Miller J.
[1]
Ms. Olney appeals by way of informal procedure
the Minister of National Revenue’s (the “Minister”)
assessment of her 2011 taxation year. The Minister denied moving expenses
pursuant to section 62 of the Income Tax Act (the “Act”) and medical expenses pursuant to section
118.2 of the Act as follows:
Medical expenses
-
Cell phone $946.30
-
Lawn care $460.00
-
Personal grooming $1,894.00
-
CAA Auto Club Membership $76.56
-
Clothing alterations $1,177.24
-
Personal trainer $3,796.80
-
Housekeeping $1,220.00
Moving expenses
-
Search for home in Calgary $2,201.05
-
Packing assistance $200.00
-
Moving-storage $1,333.34
-
Transport of vehicle to Calgary:
-
Meals $348.85
-
Accommodation $1,016.89
-
Taxi to airport $26.00
-
Return airfare $287.83
[2]
At the trial the Respondent conceded the
following:
Moving expenses –
all but the scouting trip expense of $2,201.05 for the search for the home in Calgary.
Medical expenses –
lawn care, personal grooming and housekeeping.
[3]
Ms. Olney is one of a number of Canadians who
has suffered the effect of the drug Thalidomide. She has virtually no arms and has
small hands with just three fingers. Her doctor, Dr. Mongeau, summarized it as
follows:
There is no doubt
that it is a very severe case of malformations and she suffers of a major
disability and should be classified in category 3.
[4]
Despite this disability, Ms. Olney has strived
to maintain an independent life, contributing fully to our society. She has
succeeded. Her testimony was eloquent and heartfelt. Regrettably, she feels
harassed and punished by the Government of Canada for questioning the above
expenses, suggesting such an attack is unconscionable given the Government of
Canada’s responsibility in connection with this drug. While I understand Ms.
Olney’s depth of emotion, the task is to determine whether the expenses fall
within the legal definition of moving expense and medical expense. The task of
the Canada Revenue Agency (the “CRA”), and
ultimately of this Court, is not, out of sympathy for Ms Olney or retribution
against the Government of Canada, to pretend medical expenses or moving
expenses are something other than what the law says they are.
[5]
In 2011, Ms. Olney moved from Ontario to Alberta for work purposes. To that point a reputable accounting firm had been preparing her
tax returns and for prior years claimed similar expenses as she is claiming in
2011, the only difference being the moving expenses. The medical expenses,
according to Ms. Olney, had always been accepted. On her move to Alberta her returns would have gone to the Winnipeg taxation office, instead of Shawinigan. This is where her expenses have been questioned by the CRA.
[6]
Given her very specific needs for accommodation,
Ms. Olney made a trip to Calgary, meeting her brother from Vancouver there, to
search for appropriate housing. She found a rental accommodation, but it
ultimately was not satisfactory so she moved to a more permanent home in 2013.
The cost for her and her brother to go to Calgary in search of a home is the
$2,201.05 expense claimed by Ms. Olney as a moving expense.
[7]
Ms. Olney was very clear that she took all steps
necessary to live independently without having to incur the cost of a full-time
attendant. But this had its obstacles. For example, it is not possible for Ms.
Olney to wash her hair herself, to dress in clothes with long sleeves or with
zippers or buttons, to maintain the property or to properly cook often having
to rely on prepared foods. She has engaged service providers to help where
possible and also relied on family and friends. My impression is that she has
not simply managed, but she has achieved to a great extent the independence she
sought.
[8]
With respect to the disputed medical expenses, I
will describe each of them in turn.
Cell phone/CAA
membership
[9]
Ms. Olney testified that she needed the cell
phone and the CCA membership for automobiles emergencies, as she was incapable
of dealing with any automobile problems that might occur while out driving.
Personal trainer
[10]
In July 2010, Ms. Olney’s doctor, Dr. Robert Esguerra,
wrote “To whom it may concern” as follows:
Marie Olney has been
a patient in my family practice since 2003. Ms. Olney is a victim of the maternal
use of the drug Thalidomide, which result in phocomelia. Both of her arms are
of a very short length (approximately 7 inches) with small hands and each only
has three fingers. She does not have all her arm and shoulder muscles,
especially on her left side. Therefore, she lacks dexterity, strength, and the
ability to raise her arms. Because of their length, she does not have the same
reach with her arms as most people.
Ms. Olney does
manage to live independently and happily with only some attendant services which I have covered in a previous document. The purpose of this document is to inform
you that I am recommending that Ms. Olney use the services of a personal
trainer to allow her to maintain her independence for as long as possible. Ms.
Olney uses her feet and legs to assist her to accomplish many everyday
activities such as toileting, dressing and grooming. It is therefore essential
that Ms. Olney know, and be spotted on, the proper exercises to do on a
continual basis to maintain the strength and flexibility in her core and legs.
Special care must also be taken to ensure that she maintains the abilities she
does have in her upper body and arms without damage to or overuse of her back.
Ms. Olney
testified that her doctor recommended a personal trainer who Ms. Olney
indicated was less expensive than a physiotherapist. The doctor provided some
names. The personal trainer, Marta Wein, was able to come to Ms. Olney’s home
to provide the training necessary. Ms. Olney stated Ms. Wein researched how to
assist her. Also, Ms. Olney’s doctor would suggest what training would help,
and Ms. Olney would pass that information onto the personal trainer. Given how
Ms. Olney relied on her legs, feet, mouth and chin to carry on daily
activities, she required exercises to maintain strength in her core and legs.
Clothing
alterations
[11]
It was difficult for Ms. Olney to buy clothes
off-the-rack. Most required alterations. Ms. Olney herself was not capable of
sewing or making any such alterations. Until 2002, her mother was able to look
after this for her, but in recent years she has had to hire someone to make the
necessary alterations.
Analysis
[12]
With respect to medical expenses Ms. Olney
relies primarily on subparagraph 118.2(2)(b.1) of the Act, which
reads as follows:
118.2(2)(b.1) as remuneration for attendant care provided
in Canada to the patient if
(i) the patient is a person in respect of whom an amount may
be deducted under section 118.3 in computing a taxpayer’s tax payable under
this Part for the taxation year in which the expense was incurred,
(ii) no part of the remuneration is included in computing a
deduction claimed in respect of the patient under section 63 or 64 or paragraph
(b), (b.2), (c), (d) or (e) for any taxation year,
(iii) at the time the remuneration is paid, the attendant is
neither the individual’s spouse or common- law partner nor under 18 years of
age, and
(iv) each receipt filed with the Minister to prove payment of
the remuneration was issued by the payee and contains, where the payee is an
individual, that individual’s Social Insurance Number,
to the extent that the total of amounts so paid
does not exceed $10,000 (or $20,000 if the individual dies in the year);
[13]
The Courts have always been cognizant that
provisions such as the medical expense provisions are intended to provide
relief and consequently have been liberally and humanely interpreted. See for
example comments of former Chief Justice Bowman in Radage v Her Majesty the
Queen,
which were cited by Justice Bowie in Pina Garcea Zaffino v Her Majesty
the Queen.
In the Zaffino case, the CRA advised the taxpayer in a Notice of
Confirmation that:
Attendant care is
care provided by an attendant who performs those personal tasks, which the
person with the disability is unable to do for himself or herself. Such tasks
could include, meal preparation, maid and cleaning services and transportation.
However, if a person is employed to do a specific task, for example, provide
maid and cleaning services, the provision of such would not be viewed as “attendant care”.
[14]
Justice Bowie disagreed with this view of “attendant care” stating instead,
I must confess that
if there is logic in this analysis it escapes me. I should have thought that
the expression “attendant care” refers to the
totality of the services provided by an attendant, and that if a particular service falls within it when it is delivered along with other services, then it must necessarily
fall within when delivered alone. The fact that a particular taxpayer requires
to obtain only one of the services commercially surely does not change the
nature of that service from being “attendant care”
to something else.
[15]
Justice Bowie went on to consider what is meant
by “attendant care”:
The Canadian Oxford
Dictionary defines an “attendant” as “a person employed to wait on others or provide a service” and the many meanings of the word “care” include “process of looking after or providing for someone…the
provision of what is needed for health or protection.” The expression “les
soins de préposé” used in the French version of the Act is equally expansive in
meaning… The ordinary meaning of the expression, in either official language,
takes in the kind of cleaning services for which the Appellant claims in this
case, as the Respondent admits. Those services cannot then be excluded from
that meaning simply because the Appellant is fortunate enough to obtain the
other attendant services that she requires from other sources at no cost. If
house cleaning is an “attendant service” when it is provided along with other services then it surely must be an “attendant service” when it is provided alone.
[16]
I turn now to each of the medical expenses in
dispute.
Cell phone and
CAA membership
[17]
Ms. Olney emphasized that due to her impairment
she needed these services for emergency purposes. I agree. However, need is not
the legal test to qualify as a medical expense. The medical expense must be
found in the list of medical expenses set out in paragraph 118.2(2) of the Act.
Ms. Olney, quite reasonably, suggested it is impossible for the legislators to
identify every possible expense. Consequently some categories are stated in
general terms, leaving room for the court’s interpretation as to what might
fit. However, it is not open to the court to create new categories – that is
the role of the legislators.
[18]
So, where can Ms. Olney place the cell phone and
CAA membership in a list of medical expenses? She suggested that they might
fall under subparagraph 118.2(2)(b.1) of the Act – attendant
care.
[19]
This is the provision Justice Bowie relied upon
in allowing home cleaning services in Zaffino, and which the Respondent
in this case has relied upon in conceding lawn care and personal grooming.
These are all expenses paid for attendant care; that is, care provided by an
attendant, a person. Neither payment for a cell phone nor payment for CAA
membership is payment to a person for “attendant care”.
That would be stretching these words well beyond any justifiable meaning. I can
find no provision under which a CAA membership would qualify as a medical
expense.
[20]
With respect to the cell phone the only possible
applicable provision is subparagraph 118.2(2)(m) of the Act which
reads:
(m) for
any device or equipment for use by the patient that
(i) is
of a prescribed kind,
(ii) is
prescribed by a medical practitioner,
(iii) is
not described in any other paragraph of this subsection, and
(iv) meets such conditions as are prescribed as to its use or
the reason for its acquisition;
to
the extent that the amount so paid does not exceed the amount, if any,
prescribed in respect of the device or equipment;
[21]
It is necessary to turn to Regulation 5700 of
the Income Tax Regulations (the “Regulations”)
to determine what is prescribed. I have reviewed all devices identified in the Regulations
and can find none that would include a cell phone.
[22]
The cell phone and CAA membership, while needed
by Ms. Olney, are simply not medical expenses under the provisions of the Act.
Personal trainer
[23]
There are two possibilities for Ms. Olney’s
payment to her personal trainer to be considered medical expenses: subparagraphs
118.2(2)(l.9) and 118.2(2)(b.1) of the Act.
[24]
Dealing first with subparagraph 118.2(2)(b.1)
of the Act, as indicated in the earlier discussion of attendant care,
this implies assistance from an individual and the assistance must be in the
form of care provided to Ms. Olney. The Respondent has recognized that
attendant care can be provided by more than one individual; consequently, the
concession on personal grooming and lawn care expense. I am hard-pressed to see
how an individual mowing the lawn is providing “attendant
care” while a personal trainer attending at Ms. Olney’s residence on the
recommendation of her physician is not.
[25]
Subparagraph 118.2(2)(l.9) reads:
l.9 as remuneration for therapy
provided to the patient because of the patient’s severe and prolonged
impairment, if
(i) because of the patient’s impairment, an amount may be
deducted under section 118.3 in computing a taxpayer’s tax payable under this
Part for the taxation year in which the remuneration is paid,
(ii) the therapy is prescribed by, and administered under the
general supervision of,
(A) a medical doctor or a psychologist, in the case of mental
impairment, and
(B) a medical doctor or an occupational therapist, in the case
of a physical impairment,
(iii) at the time the remuneration is paid, the payee is
neither the individual’s spouse or common-law partner nor under 18 years of
age, and
(iv)
each receipt filed with the Minister to prove
payment of the remuneration was issued by the payee and contains, where the
payee is an individual, that individual’s Social Insurance Number;
It is necessary
to determine whether what Ms. Wein provided was therapy. I have no
difficulty in finding that what the personal trainer did, in ensuring
Ms. Olney maintained strength in dealing with not having two arms, was a
form of treatment of a physical disorder, therapy. What Ms. Olney was receiving
was a form of rehabilitative therapy. Rehabilitative means in effect restoring
to normal life by training. I cannot imagine a more apt description of what Ms. Olney
was trying to accomplish with her personal trainer. I also find that given Dr.
Esguerra’s recommendation for the personal training that this fits within the
letter and spirit of therapy as a medical expense under subparagraph 118.2(2)(l.9)
of the Act.
[26]
The stumbling block with respect to subparagraph
118.2(2)(l.9) of the Act is that the therapy must be under the “general supervision” of the doctor. The evidence from
Ms. Olney was that the doctor would advise her of the appropriate treatment
from the personal trainer which she would relay to Ms. Wein. Taking a
compassionate view of the situation this could constitute “general” supervision.
Alteration to
clothes
[27]
Ms. Olney paid a person to do the clothes
alterations. Can this be swept into the broad category of attendant care? If
house cleaning and lawn mowing qualify as attendant care medical expenses, again
I see no reason that a payment to someone to do something Ms. Olney could not
do herself, that is integral to her living a normal life should not also be
considered attendant care. Simply because the alteration of the clothes might
take place outside the home, this does not mean it is not attendant care. If a
full-time attendant handled clothes alterations there would not be an
adjustment denying some of the attendant’s expense, as it related to clothes
alterations. It is an expense, I would suggest, that is well within the range
of what an attendant might be expected to do for someone such as
Ms. Olney. I acknowledge this might be taking an expansive, compassionate
view but this is in accordance with prior direction of this Court.
Moving expense
[28]
The only moving expense in dispute is the cost
of the house scouting to Calgary in search of a suitable home. It is well
settled that section 62 of the Act, the provision outlining eligible
moving expenses, does not allow for house hunting expenses. As stated by
Justice Beaubier in Robert T. Ball v Her Majesty the Queen, this section is confined to
moving expenses in the ordinary meaning of that term, that is, physically
moving. That does not include the cost of a house hunting trip.
[29]
Is this principle sufficiently flexible that a
taxpayer with special needs in the acquisition of a home can claim greater
moving expenses? No, it is not. Regardless of the nature of the home sought, a
scouting trip is simply not a moving expense.
[30]
Ms. Olney then suggested that such expense
should be covered as a medical expense. With respect, I cannot agree with that
notion. If her expense is not legitimately deductible, I fail to see how the
expense incurred by her brother joining her on the trip can possibly be
deductible as a medical expense.
[31]
Subparagraph 118.2(2)(l.5) of the Act
specifically includes in medical expense reasonable moving expenses, but again
only as defined under paragraph 62(3) of the Act. This does not
help Ms. Olney.
[32]
Finally, Ms. Olney suggests the expense can be
captured under the attendant care medical expense. Given the cost of the house
scouting trip is not deductible, trying to then classify it as attendant care
would be no different than classifying the cost of travel for any purpose as
attendant care. The attendant care expense covers fees to an attendant for
care, not travel costs. The evidence was not as detailed with respect to these
expenses as it might be, but I have certainly not been satisfied the $2,201.05
was paid to her brother to attend upon her. The amount has simply not been
proven as an attendant care medical expense.
[33]
The Appeal is allowed and referred back to the
Minister for reconsideration and reassessment on the basis that:
a.
all additional expenses claimed as medical
expenses, other than the cell phone and CAA membership, are medical expenses
pursuant to paragraph 118.2(2) of the Act;
b.
all moving expenses, other than the $2,201.05
for a scouting trip, are deductible moving expenses pursuant to section 62 of
the Act.
I award lump sum costs to Ms. Olney of $200.00.
Signed at Ottawa, Canada, this 29th day of August 2014.
“Campbell J. Miller”
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