Citation: 2012 TCC 177
Date: 20120529
Docket: 2011‑3026(IT)I
BETWEEN:
ANNE JOHNSTON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Boyle J.
[1]
Mrs. Anne Johnston
claimed a medical expense tax credit (“METC”) in 2008 in respect of the cost of
acquiring and installing a hot tub to be used as a hydrotherapy pool for her
daughter Erin who is severely and significantly disabled with cerebral palsy‑related
spastic quadriplegia and other conditions.
[2]
Erin is the adult
daughter of the Appellant, Anne Johnston, and her husband, Brian Johnston.
Erin has suffered from multiple disabilities since birth. She has cerebral
palsy‑related spastic quadriplegia, contractures of limbs and is
dependent on a wheelchair for mobility. The contracture of her limbs limits her
physical capability to move and to control her muscle movements. She has had
surgery to cut the tendons in both her legs. Erin is blind, has hearing loss in
both ears, and is only somewhat able to feed herself with help. Erin has
supportive, caring and loving parents, family and friends.
[3]
The Johnstons’ home has
been altered for Erin’s benefit. There is a lift outside as well as a ramp, a
bedroom and bathroom for her have been set up on the main floor, barriers to
her ability to crawl about or to move in her wheelchair have been removed.
[4]
Erin’s doctor
recommended daily hydrotherapy in an appropriate hot tub pool to assist with
her muscle stimulation and relaxation, breathing and blood circulation, to
relieve her pain and suffering, and to enhance her muscle mobility and flexibility.
[5]
After Erin turned 18,
she was no longer able to use the hydrotherapy facilities that had previously
been available to the Johnstons locally in the Sarnia area. Upon the advice of
her doctor, the Johnstons set out to acquire and install an appropriate pool for
hydrotherapy. They were able to determine that a particular make and model of
available hot tub had the appropriate capacity, jet locations, pressure and
volume to best help Erin. The cost, including installation, only slightly
exceeded the $10,000 annual limit.
[6]
Erin’s father lifts her
into the pool 5 days a week for a one‑hour session. Erin’s
professional therapists have trained Mr. Johnston to be able to complete
this additional daily therapy. The Johnstons report that this hydrotherapy is
successful in providing their daughter with significant and noticeable relief,
both physically and in her mental outlook and attitude for the day.
[7]
The evidence is clear
that the Johnstons acquired and use the hot tub pool solely for Erin’s
recommended treatments and benefits. There is no suggestion that they otherwise
would have wanted or used a hot tub. Their only thoughts were of Erin’s needs,
comfort and relief. They had not even considered the possibility of a tax
credit when acquiring the pool for Erin.
[8]
Paragraph 118.2(2)(l.2)
of the Income Tax Act (the “Act”) reads as follows:
(2) Medical expenses – For the purposes of subsection 118.2(1), a medical expense of
an individual is an amount paid
. . .
(l.2) for reasonable expenses relating to renovations or
alterations to a dwelling of the patient who lacks normal physical development
or has a severe and prolonged mobility impairment, to enable the patient to
gain access to, or to be mobile or functional within, the dwelling, provided
that such expenses
(i) are not of a type that would typically be expected to
increase the value of the dwelling, and
(ii) are of a type that would not normally be incurred by
persons who have normal physical development or who do not have a severe and
prolonged mobility impairment;
[9]
Prior to the amendments
to this provision which added subparagraphs (i) and (ii) in 2005, the
expenses in a case such as Erin’s would have qualified. Erin lacks normal
physical development and has a severe and prolonged mobility impairment. The hot
tub hydrotherapy enhances her mobility and functioning within the home.
[10]
However, in 2005,
Parliament amended the METC provision in question. Subparagraphs (i) and
(ii) were added upon the recommendation of the Department of Finance in response
to decisions of this Court and of the Federal Court of Appeal which permitted
expenses for hot tubs and hardwood flooring to qualify in otherwise appropriate
circumstances.
[11]
Subparagraph (i)
provides that, in addition to otherwise qualifying for the METC, a home
renovation or alteration expense must not be of a type that would typically be
expected to increase the value of the home in question. There was some evidence
admitted before the Court that the values of hot tubs and pools are very subjective
depending upon potential purchasers and can often limit the available market or
not increase the value of the property. This was the advice given to the
Johnstons by a professional realtor. In this case, I am satisfied that the
nature of the installation of the Johnstons’ hot tub was not of a type that
would be expected to increase the value of their home and subparagraph (i)
does not disqualify the hot tub expenses in this case.
[12]
Subparagraph (ii)
is however more challenging and problematic. In essence, it requires that
qualifying home renovations or alterations be of a type that one would not
normally expect a person of normal physical development and mobility to have
done. While there was no evidence led either way, I must take judicial
notice that many fully able bodied Canadians put similar hot tubs in their
homes and yards. In my opinion, a typical hot tub generally available in the
retail market such as the Johnstons’ is not able to satisfy this final
requirement.
[13]
It is perhaps
unfortunate that, in a case such as Erin Johnstons’, this last restriction
applies regardless of the purpose or extent of the use of the hot tub for her
hydrotherapy sessions. The Johnstons and their agent, Mr. Norris, may well
be correct in questioning a policy that does not provide relief even though the
primary purpose of having the hot tub installed was Erin’s needs and even
though the hot tub is only used for her needs. However, Parliament’s legislated
intention could not be more clear. This is evidenced by the Department of
Finance’s Explanatory Notes and the Budget papers accompanying the amendments
to the legislation in 2005. This is also consistent with the decision of
Paris J. in Hendricks v. The Queen, 2008 TCC 497,
2008 DTC 4852, and my decision in Barnes v. The Queen,
2009 TCC 429, 2009 DTC 1282, in 2009. Hendricks
dealt with the installation of hardwood floors benefiting a person suffering from
severe asthma. Barnes involved a taxpayer’s daughter in similar
circumstances to those of Erin for whom a swimming pool had been installed for
her needs and sole use upon the recommendation of her doctors. This Court is
unable to ignore or override the clear statutory provisions enacted by
Parliament. This is the case even if, as suggested by the Appellant’s agent,
the amendments are overly restrictive to respond to previous cases of perceived
abuse which does not arise in this case.
[14]
This is not to say
that, in an appropriate case, a hot tub or a swimming pool especially designed
or altered for a person for therapeutic physiotherapy purposes will be unable
to qualify.
[15]
Mrs. Johnston’s
appeal fails the statutory test for the single reason that subparagraph (ii)
imposes a requirement that the Johnstons’ hot tub does not meet. The bar has
been clearly set high by Parliament.
[16]
Mrs. Johnston’s
agent also raised discrimination arguments based upon the equality provisions
of the Canadian Charter of Rights and Freedoms (the “Charter”).
His arguments were based upon the unequal and discriminatory treatment of
Erin Johnston. However, I am unable to see any discrimination or
unequal treatment of Erin as compared to other Canadians. No other Canadian,
whether a child or adult, whether a dependent or not, and whether disabled or
not, is entitled to claim a hot tub in such circumstances as a METC. As
I understood it, the essence of the complaint under the Charter was
that no tax assistance was available in respect of her recommended and
necessary medical expense for her hydrotherapy. Neither defining which medical
expenses will qualify for the METC nor changing the requirements of those
qualifications constitutes any form of prohibited Charter
discrimination. Indeed it is Parliament’s job to do precisely that with respect
to the establishment and ongoing delivery of social programs and assistance. It
is not open to this Court to substitute its judgment for where such lines
should be drawn or redrawn.
[17]
The Court regrets that
it is unable under the provisions of the Act to afford Mrs. Johnston
the relief she has asked for. The Court wishes Erin and her parents continued
success with her treatments. It was clear from both of her parents’ evidence
that Erin’s continued relief is genuinely more important to them than their tax
claim.
[18]
The law requires me to
dismiss this appeal.
Signed at Toronto,
Ontario, this 29th day of May 2012.
"Patrick Boyle"