Date: 20001019
Docket: 2000-1272-IT-I
BETWEEN:
ALAN WOOD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Beaubier, J.T.C.C.
[1] On the application of the Appellant it is ordered that the address of the Appellant for the purposes of this appeal shall henceforth be:
1174 Pettman Road
Kelowna, British Columbia
V1Z 2R7.
[2] At all material times he and his wife have resided in Kelowna. The Appellant was the only witness.
[3] Paragraphs 1 to 7 inclusive of the Reply to the Notice of Appeal read:
A. STATEMENT OF FACTS
1. He admits that CCRA is relying on paragraph 118.2(m) of the Income Tax Act and on regulation 5700 of the Income Tax Regulations as stated in the Notice of Appeal.
2. He has no knowledge of the other allegations of fact contained in the Notice of Appeal and puts the Appellant to the strict proof thereof.
3. The Minister of National Revenue (the "Minister") initially assessed the Appellant for the 1998 year by Notice dated May 10, 1999.
4. In computing income for the 1998 taxation year, the Appellant claimed $6,669.00 as a medical expense for the cost of a hot tub.
5. In so reassessing the Appellant, the Minister relied on the following assumptions of fact:
a) the Appellant claimed the $6,669.00 cost of a hot tub as a medical expense;
b) the hot tub was not a device or equipment of a prescribed kind; and
c) the Appellant's spouse, Kathleen Wood, does not have an impairment that affects her mobility.
6. The hot tub was not a renovation or alteration to the Appellant's dwelling to enable access to or to facilitate mobility or other functioning within the dwelling.
B. ISSUES TO BE DECIDED
7. The issue is whether the Appellant was entitled to claim the $6,669.00 cost of a hot tub as a medical expense within the meaning of subsections 118.2(1) and 118.2(2) of the Income Tax Act.
[4] The Appellant's wife Kathleen suffers from neurofibromitosis central type II. She also has brain seizures from time to time due to stress that act like strokes. They affect her eyesight, balance and hearing. She has tumours in the upper half of her body. In 1994 she had two major brain surgeries for neurofibroma of the brain. Her last brain surgery on February 27, 1995 resulted in her being in a coma for 37 days in hospital and 3 additional months in a rehabilitation centre. These seizures have continued in the forms of petit and grand mals. When they occur she loses muscle control on the right side for periods of days.
[5] As a result, Mrs. Wood was receiving hydro-therapy at the hospital in Kelowna twice a week. Due to medical financial cutbacks these were reduced to once per week. Mrs. Wood cannot walk by herself. She has no hearing in her right ear, 20 percent hearing in her left ear, only partial eyesight in her right eye and paralysis in her right arm and leg. Before the operations she was a ski and physical instructor. Her condition is permanent.
[6] In 1998 Mrs. Wood qualified for the disability tax credit and for B.C.'s Choice in Supports for Independent Living. Mrs. Wood's disease is genetic and has created a hump back in her which throws her off balance. She can only move on stairs with aid and cannot be left alone or she will push herself too far whereupon she will fall or be immobile and be unable to recover without help. She takes a total of five prescription drugs.
[7] As a result her doctor, Dr. K.A. Canning, prescribed a hot tub (Exhibit A-1) on February 11, 1998 in his usual form of phraseology. When he introduced this exhibit, Mr. Wood described the February date offhandedly. When pressed on the point, he looked at the exhibit, which is all in numbers, and couldn't be sure. The Court finds the February 11 date to be the correct date because it was the date Mr. Wood initially described in a very credible manner. He is a thoroughly honest witness.
[8] On October 24, 1998 the tub was purchased after the date of the prescription. The front of the Wood house had to be redone to accommodate it.
[9] Without the use of the tub and exercises in it, Mrs. Wood cannot move her body at all during the winter. Dr. Canning has certified that her use of the tub has enhanced Mrs. Wood's mobility. Mrs. Wood uses the hot tub a number of times each day and does an exercise routine in it.
[10] She also goes to the Parkinson Recreational Centre twice a week for exercises and when it is closed, she does exercises two evenings each week in the hot tub.
[11] This tub was chosen by the Wood family because when it was on sale it was the best that they could afford that would suit Mrs. Wood's needs. It had what they considered to be the right nozzles to assist her. With its use, she has become more mobile both within and outside of her dwelling.
[12] Paragraph 118.2(2)(m) of the Income Tax Act reads:
118.2 (2) For the purposes of subsection (1), a medical expense of an individual is an amount paid ...
(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;
...
[13] Regulation 5700(i) reads:
5700 For the purposes of paragraph 118.2(2)(m) of the Act, a device or equipment is prescribed if it is a
...
(i) device that is designed to assist an individual in walking where the individual has a mobility impairment; ...
[14] Provisions such as Section 118.2 – the "medical expense credit", the disability tax credit and the child tax credit (which has replaced the former federal family allowance) appear to have been inserted by the federal government into the Income Tax Act for two reasons:
(1) To enable the federal government to participate in social welfare programmes as a part of its policy, and
(2) To alleviate the heavy income tax burden on individuals and, where provincial governments adopt the Income Tax Act, to share that alleviation with provincial governments.
Similarly, other provisions have been legislated to provide incentives for various kinds of investments or expenditures to bring about increased production, to further environmental causes, to assist cultural endeavours or to bring about changes in living standards or habitats or investments in provinces or other geographic areas such as the north.
[15] It is in light of these occurrences in the Income Tax Act that Section 118.2 and the Regulation must be examined. In Corporation Notre-Dame de Bon-Secours v. Communaute Urbaine de Quebec and City of Quebec, 95 DTC 5017, Gonthier, J. stated at the end of Section A of his analysis:
The rules formulated in the preceding pages, some of which were relied on recently in Symes v. Canada [1993] 4 S.C.R. 695, may be summarized as follows:
- The interpretation of tax legislation should follow the ordinary rules of interpretation;
- A legislative provision should be given a strict or liberal interpretation depending on the purpose underlying it, and that purpose must be identified in light of the context of the statute, its objective and the legislative intent: this is the teleological approach;
- The teleological approach will favour the taxpayer or the tax department depending solely on the legislative provision in question, and not on the existence of predetermined presumptions;
- Substance should be given precedence over form to the extent that this is consistent with the wording and objective of the statute;
- Only a reasonable doubt, not resolved by the ordinary rules of interpretation, will be settled by recourse to the residual presumption in favour of the taxpayer.
[16] The purpose of Section 118.2 and the Regulation is to assist people such as the Woods. Objectively, the hot tub in question is not a piece of custom equipment designed exclusively for Mrs. Wood. She couldn't afford anything like that. But, looked at objectively, the hot tub in question allowed room for her to conduct her prescribed exercises and had hot water jets at locations that would assist her to ease her impediments and to walk and move. It was of a design that assisted her and while it was not customized for her and it did not have everything that Mrs. Wood needed, within the Woods' means, it can be said that it was exactly right for her. In substance and objectively speaking, it was designed for her and to assist her.
[17] Section 118.2 and Regulation 5700(i) are not to be interpreted to hinder the Woods from purchasing a device. Rather, they are intended to help them to do so.
[18] As a result, the Court finds that this hot tub is a device designed to assist Mrs. Wood's walking and mobility both in and out of her dwelling.
[19] The appeal is allowed.
[20] The Appellant is awarded the sum of $100.00 on account of his disbursements incurred in the process of conducting this appeal.
Signed at Victoria, British Columbia, this 19th day of October 2000.
"D.W. Beaubier"
J.T.C.C.