Tax Court of Canada Judgments

Date: 19980716

Docket: 96-262-IT-I

BETWEEN:

FRED WEEKS,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Amended reasons for judgment

Teskey, J.T.C.C.

[1] The Appellant appeals his assessment of income tax for the years 1991, 1992, 1993 and 1994. In his Notice of Appeal, he elected the informal procedure.

Issues

[2] The issues in these appeals are:

(1) Can the Appellant's home be considered a "nursing home" for the purposes of paragraphs 118.2(2)(b) and (d) of the Income Tax Act (the "Act")? If the answer to number (1) is in the negative, then alternatively:

(2) Can the Appellant's home be considered an "other place" for the purposes of paragraph 118.2(2)(e) of the Act? If the answer to number (2) is in the negative, then alternatively:

(3) Does subsection 118.2(2) of the Act discriminate against the Appellant, contrary to section 15 of the Charter of Rights and Freedoms (the "Charter")? If the answer to number (3) is positive, then alternatively:

(4) Would the infringement be justified under section 1 of the Charter? And, in any event:

(5) Can the outstanding expenses be characterized as medical expenses under paragraphs 118.2(2)(b), (d) and (e) of the Act?

Facts

[3] The parties filed with the Court as Exhibit A-1 an agreed statement of facts containing 14 paragraphs which read:

1. The taxpayer’s son, John Weeks, is currently 18 years of age and resides with the taxpayer and his wife, as he has done his entire life.

2. John Weeks was born with a congenital brain malformation as a consequence of holopronsencephaly syndrome and lissencephaly.

3. John Weeks is a person who has a severe and prolonged mental and physical impairment of a nature which would make him eligible for the disability tax credit in subsection 118.3(1) of the Income Tax Act but for paragraph 118.3(1)(c).

4. John Weeks required care and supervision 24 hours per day, 7 days a week because of his disabilities during the taxation years in question.

5. John Weeks, now and in the foreseeable future, will continue to be dependent on others for his personal needs and care.

6. John Weeks lacks normal mental capacity.

7. Based on previous medical literature, it would have been predicted that a person with a disability comparable to that of John Weeks should have had a very reduced life experience and life expectancy.

8. John Weeks requires understanding adult supervision, care and control for everything he does and needs, virtually being unable to care for himself or to make wise decisions for himself. He is disabled socially, mentally, cognitively and physically.

9. This proceeding is an appeal from the concurrent Notices of Reassessment, dated May 26, 1995 for the Appellant’s 1991, 1992 and 1993 taxation years and from a Notice of Assessment, dated May 30, 1995, for the Appellant’s 1994 taxation year. The Notices will hereinafter be referred to as the Reassessments.

10. The Appellant had claimed in his tax return for each of the taxation years under appeal the medical expense credit and the disability tax credit in respect of his son, John Weeks.

11. The Minister of National Revenue (Minister) denied the Appellant the disability tax credit. The Appellant withdrew the claim to the credit.

12. Of the items outlined in Appellant’s Written Outline of Argument Schedules A and B, the following are no longer in issue in this Appeal:

·                      Community Association for Riding for the Disabled

·                      Sunny View Summer Enrichment Program

·                      Shah Franco Martial Arts

·                      Health Care Supplies (related to incontinence)

·                      Multiple Vitamins

·                      Cottage Accessibility

·                      Walker

·                      Replacement/Repairs to Home

·                      Replacement Clothing

·                      Extra Laundry Costs

·                      Extra Large Bath Sheets

·                      Extra Gas / Hydro

·                      Cleaning Rugs and Furniture

·                      Bendection Meeting (claim withdrawn by appellant)

·                      Ankle & Arm Weights

·                      Medical Investigation Tools (claim withdrawn by appellant)

13. The remaining outstanding expenses (Outstanding Expenses) for which the

medical expense tax credit was disallowed related to the following items:

·                      Transportation Costs in 1993 and 1994

·                      Computer Equipment in 1994

·                      Wheelchair Games in 1992

·                      Stimulation in each taxation year under appeal

·                      Books, CDs and Videos in 1994

·                      Toys and Equipment in 1991, 1992, and 1993.

14. The Appellant contends that ss. 118.2(2)(b), (d) and (e) of the Income Tax Act permit the remaining outstanding expenses to be claimed as eligible medical expenses or in the alternative that they are in violation of s.15(1) of the Canadian Charter of Rights and Freedoms.

[4] Of the reassessments before me, the Minister of National Revenue (the "Minister") allowed some of the claimed medical expenses and disallowed the rest as follows:

	1991 $	1992 $	1993 $	1994 $
Total medical expenses claimed by the Appellant	19,730.62	22,078.61	35,692.84	47,551.82
Medical expenses allowed by the Minister	12,259.27	12,755.45	16,377.50	11,817.45

[5] In 1997, prior to the trial, the Appellant conceded that the following expenses were not medical expenses:

Taxation Year	Expense	Amount
1992	Bendiction meeting	$ 891.63
1994	Medical investigation tools	$ 580.23

[6] The Respondent has conceded that all other medical expenses claimed by the Appellant are medical expenses for which the Appellant may claim the medical expense tax credit, except for the following expenses:

Outstanding Expenses

Expenses	1991	1992	1993	1994
	$	$	$	$
Stimulation	1,500.00	1,820.00	1,820.00	1,820.00
Toys & Equipment	1,368.61	877.04	589.89
Wheelchair games		1,250.00
Transportation costs			7,636.49	25,588.86
Books, CDs and videos				409.37
Computer Equipment				2,458.75
Total	2,868.61	3,947.04	10,046.38	30,276.98

[7] The items categorized as toys and equipment are for toys that are purchased in the normal places toys are purchased and would be played with by normal children.

[8] The items categorized as stimulation are an estimate cost of taking John to movies and concerts over the year. These expenses are normal expenses occurred by parents raising children.

[9] The wheelchair games expense was incurred to take John to West Virginia to participate in games for blind children or children that require a wheelchair for mobility. The cost included the renting of a car, food and lodging.

[10] The transportation costs included the entire cost of a 1993 Ford Aerostar van, including interest paid on a loan from Canada Trust used to purchase the van. The Appellant has been allowed the cost of converting the van to receive and discharge a wheelchair with a person on it.

[11] The items characterized as books, CDs and videos are the cost of buying books, CDs and videos in the normal places they are purchased and would be enjoyed by normal children.

[12] Computer equipment was the expense to purchase an IBM compatible computer of which no special modification has been made to accommodate John. It is a computer that would be purchased for a normal child.

[13] There was a great deal of evidence before the Court. However, because of my reasons set forth, I do not believe it serves any purpose to summarize it and my only comment would be that I accept Dr. Keith Horner's testimony as an expert in Canadian tax policy and as an economist. His estimates are the best available to the Court, and criticisms of the report by Adele D. Furrie is not accepted as she is a statistician, not an expert in economics or tax policy and she, although critical of Dr. Horner's report, could not propose alternative figures.

Analysis

[14] The relevant portion of paragraphs 118(2)(b), (d) and (e) read:

(2) Medical expenses

For the purposes of subsection (1), a medical expense of an individual is an amount paid

...

(b) as remuneration for one full-time attendant (other than a person who, at the time the remuneration is paid, is the individual's spouse or is under 18 years of age) on, or for the full-time care in a nursing home of, the patient in respect of whom an amount would, but for paragraph 118.3(1)(c), be deductible under section 118.3 in computing a taxpayer's tax payable under this Part for the taxation year in which the expense was incurred;

...

(d) for the full-time care in a nursing home of the patient, who has been certified by a medical practitioner to be a person who, by reason of lack of normal mental capacity, is and in the foreseeable future will continue to be dependent on others for the patient's personal needs and care;

(e) for the care, or the care and training, at a school, institution or other place of the patient, who has been certified by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specially provided by that school, institution or other place for the care, or the care and training, of individuals suffering from the handicap suffered by the patient;

Issue (1) – "Nursing Home"

[15] Was the family residence a nursing home? My opinion is "no", which is based on the ordinary everyday, and every person's belief of what a nursing home is. Normally, a nursing home is:

a) subject to governmental regulation;

b) enters into a contractual relationship with its residents;

c) provides professional medical staff for its residents;

d) charges fees to the extent permitted by law.

[16] "Nursing Home" is defined in Webster's Ninth New Collegiate Dictionary (Merriam Webster) as:

"a privately operated establishment where maintenance and personal or nursing care are provided for persons (as the aged or chronically ill) who are unable to care for themselves properly".

[17] Stedman's Medical Dictionary, 25th ed. (Baltimore: Williams & Wilkins 1990) at 1073, defines "Nursing Home" as:

"A convalescent home or private facility for the care of individuals who do not require hospitalization and who cannot be cared for at home".

[18] Of course, if Parliament had defined these words, that definition would prevail. The province of Ontario, in its Nursing Home Act, R.S.O. 1990, chapter 320, used the following definition:

"nursing home means any premises maintained and operated for persons requiring nursing care or in which such care is provided to two or more unrelated persons, but does not include any premises falling ....."

Issue (2) - "Other Place"

[19] Likewise, I reject the Appellant's contention that his home can be the "other place" in paragraph 118.2(2)(e) of the Act. The meaning of "other place" is limited to a place outside the family home. The ejusdem generis rule of construction applies to paragraph 118.2(2)(e). The term "other place" is part of the phrase "a school, institution or other place" and should take its meaning from the words preceding it.[1]

[20] There are common characteritics to the terms "school" and "institution" that influence the meaning of "other place":[2]

(i) both places provided care to a handicapped person outside a family home;

(ii) in both, teachers and or other professional staffs, not the family of the handicapped person, generally provide care to the handicapped person; and

(iii) both would offer their services to at least part of the public;

Issue (3) - The Charter

[21] Subsection 15(1) of the Charter provides:

Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

[22] Cory J. in his majority reasons in the Supreme Court of Canada decision of Vriend v. Alberta, 1998, 156 D.L.R. (4th) 385, when dealing with an allegation of discrimination under this provision wrote, starting at page 417, paragraph [70] through to paragraph [74]:

[70] How then should the analysis of s. 15 proceed? In Egan the two-step approach taken in Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143, 56 D.L.R. (4th) 1, and R. v. Turpin, [1989] 1 S.C.R. 1296, was summarized and described in this way (at paras. 130-131):

The first step is to determine whether, due to a distinction created by the questioned law, a claimant's right to equality before the law, equality under the law, equal protection of the law or equal benefit of the law has been denied. During this first step, the inquiry should focus upon whether the challenged law has drawn a distinction between the claimant and others, based on personal characteristics.

Not every distinction created by legislation gives rise to discrimination. Therefore, the second step must be to determine whether the distinction created by the law results in discrimination. In order to make this determination, it is necessary to consider first, whether the equality right was denied on the basis of a personal characteristics which is either enumerated in s. 15(1) or which is analogous to those enumerated, and second, whether that distinction has the effect on the claimant of imposing a burden, obligation or disadvantage not imposed upon others or of withholding or limiting access to benefits or advantages which are available to others.

A similar approach was taken by McLachlin J. in Miron (at p. 485):

The analysis under s. 15(1) involves two steps. First, the claimant must show a denial of "equal protection" or "equal benefit" of the law, as compared with some other person. Second, the claimant must show that the denial constitutes discrimination. At this second stage, in order for discrimination to be made out, the claimant must show that the denial rests on one of the grounds enumerated in s. 15(1) or an analogous ground and that the unequal treatment is based on the stereotypical application of presumed group or personal characteristics.

[71] In Miron and Egan, Lamer C.J. and La Forest, Gonthier and Major J.J. articulated a qualification which, as described in Benner v. Canada (Secretary of State), [1997] 1 S.C.R. 358, 143 D.L.R. (4th) 577 (at para. 64), "focuses on the relevancy of a distinction to the purpose of the legislation where that purpose is not itself discriminatory and recognizes that certain distinctions are outside the scope of s. 15". This approach is, to a certain extent, compatible with the notion that discrimination commonly involves the attribution of stereotypical characteristics to members of an enumerated or analogous group.

[72] It has subsequently been explained, however, that it is not only through the "stereotypical application of presumed group or personal characteristics" that discrimination can occur, although this may be common to many instances of discrimination. As stated by Sopinka J. in Eaton v. Brant County Board of Education, [1997] 1 S.C.R. 241, 142 D.L.R. (4th) 385 at paras. 66-67:

... the purpose of s. 15(1) of the Charter is not only to prevent discrimination by the attribution of stereotypical characteristics to individuals, but also to ameliorate the position of groups within Canadian society who have suffered disadvantage by exclusion from mainstream society as has been the case with disabled persons.

The principal object of certain of the prohibited grounds is the elimination of discrimination by the attribution of untrue characteristics based on stereotypical attitudes relating to immutable conditions such as race or sex ... the other equally important objective seeks to take into account the true characteristics of this group which act as headwinds to the enjoyment of society's benefits and to accommodate them.

[73] These approaches to the analysis of s. 15(1) have been summarized and adopted in subsequent cases, e.g. Eaton (at para. 62), Benner (at para. 69) and, most recently, Eldridge. In Eldridge, LaForest J., writing for the unanimous Court, stated (at para. 58):

While this Court has not adopted a uniform approach to s. 15(1), there is broad agreement on the general analytic framework; see Eaton v. Brant County Board of Education, [1997] 1 S.C.R. 241, at para. 62, Miron, supra, and Egan, supra. A person claiming a violation of s. 15(1) must first establish that, because of a distinction drawn between the claimant and others, the claimant has been denied "equal protection" or "equal benefit" of the law. Secondly, the claimant must show that the denial constitutes discrimination on the basis of one of the enumerated grounds listed in s. 15(1) or one analogous thereto.

[74] In this case, as in Eaton, Benner and Eldridge, any differences that may exist in the approach to s. 15(1) would not affect the result, and it is therefore not necessary to address those differences. The essential requirements of all these cases will be satisfied by enquiring first, whether there is a distinction which results in the denial of equality before or under the law, or of equal protection or benefit of the law; and second, whether this denial constitutes discrimination on the basis of an enumerated or analogous ground.

In summary, Cory J. concludes in paragraph [107], starting at page 429:

5. Conclusion Regarding Section 15.

[107] In summary, this Court has no choice but to conclude that the IRPA, by reason of the omission of sexual orientation as a protected ground, clearly violates s. 15 of the Charter. The IRPA in its underinclusive state creates a distinction which results in the denial of the equal benefit and protection of the law on the basis of sexual orientation, a personal characteristic which has been found to be analogous to the grounds enumerated in s. 15. ....

[23] I cannot find where any personal characteristic of the Appellant has been discriminated in regards to his race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. There is no personal characteristic of the Appellant that is at issue herein.

[24] Also, at the end of the day, the Appellant and his spouse made the free and voluntary choice to keep their badly disabled child at home.

[25] It has been demonstrated that by this decision, John Weeks has developed far greater than expected and does have a better quality of life and a greater life expectancy than if he had been placed in an institution.

[26] The Appellant and his spouse are saints and deserve a great deal of credit. My heart bleeds for them and I have nothing but the greatest admiration for them.

Issue (4) - Section 1 of the Charter

[27] I do not have to make any comment on this in light of my finding that subsection 15(1) of the Charter has not been breached.

Issue (5) - Medical Expenses

[28] Are the expenses before me "medical expenses". The answer is NO. Even if I had found for the Appellant in the affirmative on any of issues (1), (2), (3) and (4), I still would not have allowed this appeal. These expenses at issue herein are the normal personal or living expenses that most parents encounter in the raising of their children. The Appellant and his spouse elected to look after this child at home and the claimed expenses before me are the normal personal or living expenses encountered by most parents. The Respondent has allowed "all" expenses which were directly attributable to John's disability.

[29] Since the Respondent conceded prior to trial that the appeals should be allowed in the following years for the following amounts, namely:

1991 - $4,602.74

1992 - $4,484.54

1993 - $9,268.96

1994 - $4,877.16

the appeals are allowed, without costs, and the assessments are referred back to the Minister for reconsideration and reassessment on the basis that the Appellant is to be allowed additional medical expenses in the amounts of $4,602.74, $4,484.54, $9,268.96 and $4,877.16, in the respective years.

[30] The Appellant is entitled to no further relief.

Signed at Sydney, Nova Scotia, this 16th day of July 1999.

"Gordon Teskey"

J.T.C.C.

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