2001-4028(IT)I
BETWEEN:
SHARON L. KETCHEN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on August 23, 2002 at Kelowna, British Columbia, by
the Honourable Judge L.M. Little
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Nadine Taylor
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1999 taxation year is allowed, without costs, and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 22nd day of January 2003
|
"L.M. Little" |
J.T.C.C.
Date: 20030122
Docket: 2001-4028(IT)I
BETWEEN:
SHARON L. KETCHEN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Little, J.
A. FACTS
[1] The Appellant is a registered nurse who has been compelled to retire because of ill health.
[2] As a result of a number of personal problems including a traffic accident and a negative reaction from an injection for Hepatitis B the Appellant is permanently disabled. Exhibit A-1 is a letter dated October 6, 1997 from Dr. Bruce Carruthers, M.D. In his letter Dr. Carruthers stated as follows:
My diagnostic conclusion is that the patient has an overlap syndrome-primarily fibromyalgia but also chronic fatigue syndrome. ... She has not been able to do a rehab program because of aggravated symptomatology. Thus the patient remains totally disabled for work from her combination of fibromyalgia and chronic fatigue syndrome.
[3] In an attempt to obtain relief from her medical problems the Appellant attended a seminar at Onsite Workshops Living Centre Program ("Onsite") in Charlotte, Tennessee. The Appellant paid expenses of $1,795.00 (U.S.) ($2,667.00 (Cdn.)) to attend the workshop at Onsite. The Appellant stated that she was referred to the workshop by Dr. Douglas S. Coleman, M.D. for treatment of stress and relationship issues.
[4] The Appellant paid $1,826.50 to Paulette Tomasson. Paulette Tomasson is a nurse and a Registered Clinical Counsellor who provides counselling therapy to patients from her home.
[5] The Appellant purchased homeopathic remedies and received homeopathic testing services from Avie Medical Inc. ("Avie"). Avie is a company whose shares are owned by Dr. Gary B. Ryder. Dr. Ryder is a Medical Doctor, a Naturopath and a Pharmacist.
[6] In filing her income tax return for the 1999 taxation year the Appellant claimed the following expenses as medical expenses:
Onsite Workshops (Living
Centered Program) $2,667.00
P. Tomasson, R.N. 1,826.50
Avie Medical Inc. - remedies 628.00
Avie Medical Inc. - testing 235.00
$5,356.50
(unreconciled difference) (3.50)
Total Medical Expenses $5,353.00
[7] On the 4th day of December 2000 the Minister of National Revenue (the "Minister") reassessed the Appellant and disallowed the medical expenses of $5,353.00 that were claimed by the Appellant.
B. ISSUE
[8] Is the Appellant allowed to deduct the medical expenses of $5,353.00 in determining her income for the 1999 taxation year?
C. ANALYSIS
[9] The phrase "medical expenses" is defined in subsection 118.2(2) of the Income Tax Act (the "Act") as follows:
(2) Medical expenses -For the purposes of subsection (1), a medical expense of an individual is an amount paid
(a) - to a medical practitioner, dentist or nurse, or a public or licensed private hospital in respect of medical or dental services provided to a person (in this subsection referred to as the "patient") who is the individual, the individual's spouse or a dependent of the individual (within the meaning assigned by subsection 118(6)) in the taxation year in which the expense was incurred.
[10] I will now deal with the specific amounts claimed by the Appellant:
1. Onsite Workshops (Living Centered Program) - $2,667.00
Fifteen per cent of the amount of $2,667.00 paid by the Appellant to Onsite was paid for lodging and meals and 85% of $2,667.00 was paid for a group therapy workshop. These amounts were not paid to a medical practitioner or a public hospital or licensed private hospital. During the hearing the Appellant testified that Onsite was not being administered by a medical practitioner. However she said that before she went to Onsite she was told that Onsite was administered by a medical practitioner. Since there was no medical practitioner associated with Onsite, the amounts paid to Onsite are not medical expenses and are not deductible.
2. P. Tomasson - $1,826.50
The amount of $1,826.50 paid by the Appellant to P. Tomasson, R.N. was paid for counselling and group therapy. This amount does not qualify as a medical expense.
3. Avie Medical Inc. - remedies - $628.00
Avie Medical Inc. - testing - $235.00
The Appellant testified that on the advice of Dr. Gary Ryder she purchased herbs and other remedies from Avie at a price of $628.00. Dr. Ryder is a Medical Doctor, a Naturopath and a Pharmacist. The Appellant also paid $235.00 to Avie for tests administered by Avie.
In order to determine if this expense is deductible it is necessary to consider the meaning of subsection 118.2(2)(n) of the Act:
118.2(2) For the purposes of subsection (1), a medical expense of an individual is an amount paid
...
(n) for drugs, medicaments or other preparations or substances (other than those described in paragraph (k)) manufactured, sold or represented for use in the diagnosis, treatment or prevention of a disease, disorder, abnormal physical state, or the symptoms thereof or in restoring, correcting or modifying an organic function, purchased for use by the patient as prescribed by a medical practitioner or dentist and as recorded by a pharmacist;
[11] It will be noted that there are a number of criteria that must be met to come within the words of paragraph 118.2(2)(n). First, are the herbs and substances purchased by the Appellant "drugs, medicaments or other preparation or substances". It is important to note that the test is not limited to drugs, but is considerably more expansive. For example, the paragraph is not limited to "prescribed drugs" since the opening words of the paragraph contemplate a much broader range of substances. I find that the herbs and other substances would come within the words "other preparations or substances".
[12] The second criteria to note is that the substance be manufactured, sold or represented for use in a diagnosis, treatment or prevention of a disease, disorder, abnormal physical state or the symptoms thereof or in restoring, correcting or modifying an organic function. The Respondent argued that the evidence did not support a finding that the herbs and other substances met this requirement. I do not agree. The reasons that these substances are on the market are to prevent disease, treat symptoms of disease or to modify an organic function. In my view the herbs and other substances belong in the category of therapeutic products.
[13] The third criteria to consider is that the herbs and other remedies were purchased for use by the Appellant. This criteria is satisfied.
[14] The fourth criteria is that the herbs and other remedies were prescribed by a medical practitioner, Dr. Ryder. This criteria is satisfied.
[15] The fifth criteria is the requirement that the substances prescribed be "recorded by a pharmacist". The Appellant testified that Dr. Ryder is a pharmacist.
[16] I find that the amount of $628.00 qualifies as a medical expense and the Appellant may deduct this amount.
[17] I find that the amount of $235.00 is not deductible.
[18] Before concluding my comments I wish to refer to comments made by Associate Chief Judge Bowman in Lundrigan v. Canada, [2002] 2 C.T.C. 2928. Associate Chief Judge Bowman said at pages 2929-2930:
Mr. Lundrigan finds himself in almost the exactly the same position as another taxpayer who came before me, Mrs. Banman in the case of Banman v. R., [2001] 2 C.T.C. 2111, in which I said - I will simply read paragraphs 4, 5 and 6 - "I have great sympathy for the Appellant. I think she has very intelligently gone to an alternative method of treatment and has successfully treated medical conditions for her husband, herself and her daughter. Nonetheless, the herbal preparations, the vitamins and other things that she takes and that she purchases from Natural Lifestyle are not prescribed by a medical practitioner or dentist and are not recorded by a pharmacist. This is a key condition and unfortunately, it is not met. I have to take the law as I find it. I would like to be able to help them, but I merely interpret the law". And skipping a couple of references to cases, I go on to say, "I might just add one further point, I am aware from what the Appellant tells me and I'm aware generally that alternative medicines and homeopathic treatment are making great progress these days. I can well understand why in Paragraph (n) the government requires that certain medications be prescribed by a medical practitioner because there is, as yet, not very much control on the labelling or the sale of alternative medicines and that needs to be done. Sooner or later however, I think the government is going to have to face that fact that homeopathic medicines, alternative forms of treatment, herbs, natural healing, that sort of thing, are so prevalent, it should consider an amendment to the Income Tax Act and permit a tax credit in respect of these things. The Appellant is a very good example of a person who has used alternative methods successfully. I'm sorry that I cannot give her any relief, but I do commend her for her courage in coming to court".
In my view, Mr. Lundrigan, is in precisely the same position as the taxpayer in that case. I would like to be able to give him some relief, but unfortunately the law does not permit me to do so. If Doctor Raman, a medical practitioner, were to prescribe what he is taking as mentioned in his letter and if he were to be able to buy it in a pharmacy or a drugstore, I should think that that would meet the conditions of the statute, but I do not think it does so yet.
[19] I also refer with approval to the comments of my colleague Judge Miller in Bissonnette v. Canada, [2002] T.C.J. No. 94 where he referred to medical expenses and said at paragraph 12:
At this stage in the evolution of Canada's medical practice, alternative treatments are just starting to gain some recognition as justified, well-researched medical treatments. I believe case law over the next few years will expand our understanding of what can legitimately be considered medical services.
[20] The Appellant testified that the group therapy treatment received from Onsite was helpful to her condition. The Appellant also testified that the counselling and group therapy treatment from P. Tomasson was helpful. I join Associate Chief Judge Bowman in saying that the Minister of Finance should consider an amendment to the Income Tax Act to allow alternative medicine, natural healing and homeopathic treatment as medical expenses.
[21] The appeal is allowed to permit the Appellant to deduct the amount of $628.00 as a medical expense.
Signed at Vancouver, British Columbia, this 22nd day of January 2003.
|
"L.M. Little" |
J.T.C.C.
COURT FILE NO.: 2001-4028(IT)I
STYLE OF CAUSE: Sharon L. Ketchen and
Her Majesty the Queen
PLACE OF HEARING: Kelowna, British Columbia
DATE OF HEARING: August 23, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge L.M. Little
DATE OF JUDGMENT: January 22, 2003
APPEARANCES:
For the Appellant: The Appellant herself
Counsel for the Respondent: Nadine Taylor
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada