BETWEEN:
and
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Appeal heard on October 5, 2005, at Kitchener, Ontario
Before: The Honourable Justice B. Paris
Appearances:
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JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 2003 taxation year is allowed, with 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 Ottawa, Canada, this 25th day of November, 2005.
BETWEEN:
ERIN P. PATTON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
[1] The Appellant's daughter has learning disabilities. She attended a program, called the Arrowsmith Program, at the Colin MacdonaldCommunity Schoolin Hamilton Ontario in order to assist her in overcoming these disabilities. The Appellant claimed a medical expense tax credit for his 2003 taxation year for the fees paid for his daughter's attendance in the program, and for the costs of taking her to and from the program from the family home in Simcoe, Ontario each day.
[2] In assessing the Appellant, the Minister allowed the fees for attending the program as a medical expense under paragraph 118.2(2)(e) of the Income Tax Act[1], but denied the portion of the claim that related to the travel costs.
[3] The Appellant is appealing the disallowance of the travel costs as medical expenses.
[4] Section 118.2 of the Act sets out what amounts qualify as medical expenses for the purpose of claiming the tax credit. In particular, the circumstances in which travel costs qualify as medical expenses are set paragraph 118.2(2)(g). The relevant portions of that provision read:
118.2(2) For the purposes of subsection (1), a medical expense of an individual is an amount paid
. . . . .
(g) ...to a person engaged in the business of providing transportation services, to the extent that the payment is made for the transportation of
(i) the patient, ...
(ii) ... from the locality where the patient dwells to a place, not less than 40 kilometres from that locality, where medical services are normally provided, or from that place to that locality, if
(iii) substantially equivalent medical services are not available in that locality,
(iv) the route travelled by the patient is, having regard to the circumstances, a reasonably direct route, and
(v) the patient travels to that place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the patient to travel to that place to obtain those services;
[5] The Act also provides that a reasonable amount will be allowed for travel expenses under paragraph 118.2(2)(g) where commercial transportation services are not readily available and where an individual uses his or her vehicle to carry out the travel that would otherwise qualify as a medical expense[2]. In this case, the Appellant or his spouse drove their daughter to the Arrowsmith Program and back each day.
[6] The Respondent concedes that the travel costs claimed by the Appellant met all of the conditions set out in paragraph 118.2(2)(g) and in subsection 118.2(4) except for the condition that the services obtained by the patient be "medical services". At issue therefore, is whether the services received by the Appellant's daughter at the Arrowsmith Program were medical services such that the cost of traveling to obtain those services qualifies as a medical expense.
[7] The evidence showed that the Appellant's daughter suffered from global developmental delay and specific learning disabilities including dyslexia and math disability. Upon the recommendation of her family doctor, she attended the Arrowsmith Program, starting in 2001.
[8] This program was developed at the ArrowsmithSchool in Toronto, Ontario and has been licensed to several schools in Canadaand one in the United States According to the evidence Ms. Andrea Pearson, one of the program co-ordinators, it has a basis in neuroscience, and its purpose is to strengthen the weak cognitive capacities of individuals with learning disabilities. Each participant is tested in 19 areas of disability and an individual program consisting of an intensive and graduated series of mental exercises is prepared. The exercises are designed to stimulate such functions as visual memory, thinking skills, and auditory perception in order to assist the learning disabled child to develop an average level of cognitive ability. Ms. Pearson emphasized that the exercises were not "curriculum based" but were directed to developing the part of the brain responsible for the deficient learning processes.
[9] The program is delivered by persons who have received a three week intensive Arrowsmith training course. In order to qualify for the training a person must have a post-secondary degree, and most of those who receive the training have a degree in education and are certified teachers. Their work with the participants in the program is monitored by co-ordinators from Arrowsmith, such as Ms. Pearson, who review the treatment records for each student and give feed-back on a regular basis.
[10] At the ColinMacdonald Community School, the Arrowsmith Program is offered on a part-time basis, with one half of each day devoted to the cognitive exercises already described. The participants spend the remainder of each day in academic study. All but one of the staff members at the ColinMacdonald CommunitySchool who deliver the program has a degree in education. The remaining staff member has a certificate as an education assistant. None of the staff have any medical qualifications nor have they received medical training.
Arguments
[11] The Appellant's counsel argued that the Arrowsmith Program provided training or treatment designed specifically to address a medical condition. He said that the program was a form of medical treatment for Mr. Patton's daughter and was supported by medical analysis and diagnosis by her family doctor.
[12] He said that the term "medical services" in paragraph 118.2(2)(g) should be given a large and liberal interpretation and that the services should not be restricted simply to those provided by a medical practitioner.
[13] He referred to section 12 of the Interpretation Act which states that:
Every enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects.
[14] He also referred to the decision of this Court in Collins v. The Queen, 1998 CanLII 190 (T.C.C.) where this Court refused to give a narrow interpretation to the wording of paragraph 118.2(2)(e), which allows the cost of care or care and training at special schools for persons suffering from a mental or physical handicap.
[15] The Respondent's counsel argued that the term "medical services" in paragraph 118.2(2)(g) should be interpreted as including only services provided by a medical practitioner, which is not the case with the Arrowsmith Program. She said that that program was not a medical service but an educational service offered in a school setting. As support for this argument, she referred to a letter written by the Appellant's daughter's doctor where the doctor stated:
This child is under my care. She is a learning disabled child. She has been progressing only since being transferred to an alternative school; Colin Macdonald Alternative School in their Arrowsmith Programme. It is highly recommended by myself that she continue in this school environment.
... She will not achieve much education except in an intensive individualized program such as the Arrowsmith Programme ...
...
(Emphasis in original)
[16] Counsel suggests that it is clear from this letter that the services were educational in nature.
[17] She also relied on the following definition of the word "medical" found in the Webster's Dictionary to support her position that the person providing the services should be required to have formal medical training:
... of, relating to, or concerned with physicians or the practice of medicine
[18] Finally, counsel referred to the decision of the New Brunswick Court of Appeal in St. Laurent v. Sun Life Assurance Co. of Canada, 52 D.L.R. (4th) 569 where at page 3 the Court stated:
...The term medical services implies a degree of immediate control by a medically trained person such as a doctor, nurse or physiotherapist. It must, in our opinion, be something more than the mere taking of prescribed medication.
Analysis
[19] The dispute in this case is whether the "medical services" referred to in paragraph 118.2(2)(g) can be provided by someone other than a medical practitioner or person with medical training. The Respondent says simply that only a person with medical training or professional medical qualifications can provide those medical services. On the other hand, the Appellant argues that it is the purpose of the service that should determine whether the services are medical services or not, and that since the services were obtained on the recommendation of a doctor and are for the treatment of a medical condition, they should qualify as medical services.
[20] The term "medical services" is not defined in the Act. The question is whether that term is reasonably capable of more than one meaning, and if so which meaning would accord more closely with the intention of Parliament in enacting the provision.
[21] I do not consider the comments taken from the case of St. Laurent v. Sun Life Assurance Co. of Canada (supra) to be instructive in this case. The Court there was dealing with the interpretation of a contract of insurance, and was required to determine whether taking prescription drugs constituted the receipt of "medically required services". The Court's reference to medical services relate to the particular circumstances of that case which were much different than the context in which the term is used here.
[22] In addition to the definition of the word "medical" cited by counsel for the Respondent, the following definition is found in the Canadian Oxford Dictionary (2002):
Medical ... of or relating to the science or practice of medicine in general.
[23] Therefore, "medical" may mean either "related to the science of medicine" or "related to the practice of medicine". It follows that the term "medical services" is reasonably capable of more than one meaning, the broader being "services related to the science of medicine".
[24] "Medicine" is defined in the Canadian Oxford Dictionary as follows:
...the science or practice of the diagnosis, treatment, and prevention of disease, ...
(in technical use often taken to exclude surgery).
[25] "Medical services" therefore would be services related to the diagnosis, treatment and prevention of disease.
[26] The French version of the Income Tax Act uses the term "services médicaux" for medical services. The definition of "médicaux" found in Le petit Robert, nouvelle édition 2002 is: « Qui concerne la médecine » and the definition of « médecine » is « ... Science, ensemble de techniques et de pratiques qui a pour objet la conservation et le rétablissement de la santé; art de prévenir et de soigner les maladies de l'homme. » This is consistent with the broader meaning of the word "medicine" found in the Canadian Oxford English Dictionary.
[27] The context in which the term "medical services" is used in this case supports the conclusion that they would include any services relating to the scientific diagnosis, treatment and prevention of disease, not just those provided by a medical practitioner or medically trained person.
[28] Firstly, paragraph 118.2(2)(g) does not contain words to the effect that the service in question must be provided by a medical practitioner or like person. Had Parliament intended to limit the application of the provision in the manner suggested, it could have included words to that effect as it did in paragraph 118.2(2)(a) which provides that payments made for medical or dental services that are "made to medical practitioners, dentists nurses or public or private hospitals" qualify as medical expenses.
[29] Secondly, the fees that the Appellant paid for his daughter to attend the Arrowsmith Program are treated as medical expenses under paragraph 118.2(2)(e) of the Act. It would seem inconsistent to treat the fees for the services as a medical expense but to deny that they were for medical services.
[30] I also find that the interpretation suggested by counsel for the Appellant would accord more closely with the intention of Parliament in enacting the provision. The purpose of the medical expense tax credit provisions, of which subsection 118.2(2) is a part, is to provide tax relief to a person suffering from a medical condition for additional costs associated with treatment of that condition. A travel expense that is incurred in order to obtain treatment which is not available to the taxpayer locally is one such additional cost.
[31] To hold that the services received by the Appellant's daughter in the Arrowsmith Program were not medical services would, in my view defeat the intention of Parliament, especially in light of the fact that Parliament has recognized the cost of the services themselves as a medical expense. I think it would be unduly restrictive to interpret the term medical services in such a manner as to require that these services be performed by a medical practitioner. As the Federal Court of Appeal stated in Johnstonv. The Queen,[3] a provision of the Act "... must not be interpreted so restrictively as to negate or compromise the legislative intent".
[32] In conclusion, I find that the services provided in the Arrowsmith Program are medical services. The activity undertaken by the participants in the program is a form of neurological therapy designed to treat a medical condition. Such therapy was provided specifically for the purpose of strengthening weaker defective cognitive capacities at the root of the participants' learning disabilities. According to the uncontradicted evidence led on behalf of the Appellant, the techniques used in the program have a basis in neuroscience, and involve the diagnosis and treatment of the Appellant's daughter's disability. As such they are related to the science of medicine and are medical services.
[33] The appeal is therefore allowed with costs.
Signed at Ottawa, Canada, this 25th day of November 2005.
"B. Paris"
Paris, J.
STYLE OF CAUSE: ERIN P. PATTON AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Kitchener, Ontario
DATE OF HEARING: October 5, 2005
DATE OF JUDGMENT: November 25, 2005
APPEARANCES:
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Counsel for the Appellant: |
T.A. Cline
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Counsel for the Respondent: |
Amy Kendell |
COUNSEL OF RECORD:
Firm: Cline, Backus, et al.
For the Respondent: John H. Sims, Q.C.
Deputy Attorney General of Canada
Ottawa, Ontario
[1] 23rd edition, 2003, R.S.C. 1985 c.1 (5th Supp.)
[2] The relevant portion of subsection 118.2(4) reads:
Where, in circumstances in which a person engaged in the business of providing transportation services is not readily available, an individual makes use of a vehicle for a purpose described in paragraph (2)(g), the individual ... shall be deemed to have paid to a person engaged in the business of providing transportation services, in respect of the operation of the vehicle, such amount as is reasonable in the circumstances.
[3] Johnson v. the Queen, 98 DTC 6169 at paragraph 11.