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Docket: 2003-4149(IT)I |
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BETWEEN: |
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ARTHUR HERZIG, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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Appeal heard on April 26, 2004, at Toronto, Ontario.
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Before: The Honourable D.G.H. Bowman, Associate Chief Justice |
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Appearances: |
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For the Appellant: |
The appellant himself |
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Counsel for the Respondent: |
Brent E. Cuddy |
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JUDGMENT
It is ordered that the appeal from the assessment made under the Income Tax Act for the 2001 taxation year is dismissed.
Signed at Ottawa, Canada, this 6th day of May 2004.
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"D.G.H. Bowman" |
Bowman, A.C.J.
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Citation: 2004TCC344 |
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Date: 20040506 |
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Docket: 2003-4149(IT)I |
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BETWEEN: |
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ARTHUR HERZIG, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
Bowman, A.C.J.
[1] This appeal is from an assessment for the appellant's 2001 taxation year.
[2] The appellant seeks to deduct $32,762.02 as a medical expense credit. This amount was spent by him on homeopathic medicine and nutrients and herbal supplements prescribed by medical doctors, Dr. Paul Jaconello and Dr. George Zabrecky, in the treatment of Mr. Herzig's wife, Tali, who had metastatic breast cancer. Mrs. Herzig died from this condition in 1993.
[3] The total claim under paragraph 118.2(2)(n) of the Income Tax Act for 2001 was $46,266.00. The amount of $16,749.41 was allowed by the Canada Customs and Revenue Agency and $30,963.77 was disallowed. The appellant increased his claim to $32,762.02 at trial to take into account the fact that some products had been purchased in the United States in U.S. dollars.
[4] The issue is whether the cost of the nutrients and vitamins and herbal supplements may be included in computing a medical expense credit under subsection 118.2(1).
[5] Subsection 118.2(1) permits the deduction in computing tax of an amount computed in accordance with a formula in which one component is the individual's medical expenses. Medical expenses are defined to cover a number of items including (paragraph 118.2(2)(n)).
(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;
[6] The appellant also relies upon paragraph 118.2(2)(l.9), which reads:
(l.9) as remuneration for therapy provided to the patient because of the patient's severe and prolonged impairment, if
(i) because of the patient's impairment, an amount may be deducted under section 118.3 in computing a taxpayer's tax payable under this Part for the taxation year in which the remuneration is paid,
(ii) the therapy is prescribed by, and administered under the general supervision of,
(A) a medical doctor or a psychologist, in the case of mental impairment, and
(B) a medical doctor or an occupational therapist, in the case of a physical impairment,
(iii) at the time the remuneration is paid, the payee is neither the individual's spouse nor an individual who is under 18 years of age, and
(iv) each receipt filed with the Minister to prove payment of the remuneration was issued by the payee and contains, where the payee is an individual, that individual's Social Insurance Number;
[7] This is a most deserving case. Mr. Herzig testified that the oncologist gave his wife six months to live. With the use of the homeopathic medicines and supplements his wife succeeded in prolonging her life by about four years.
[8] We have, unfortunately, the decision of the Federal Court of Appeal which requires that a narrow interpretation be placed on paragraph 118.2(2)(n). In The Queen v. Ray, 2004 DTC 6028, the Federal Court of Appeal stated at page 6031:
In my view, it is reasonable to infer that the recording requirement in paragraph 118.2(2)(n) is intended to ensure that tax relief is not available for the cost of medications purchased off the shelf. There are laws throughout Canada that govern the practice of pharmacy. Although the laws are not identical for each province and territory, they have common features. Generally, they prohibit a pharmacist from dispensing certain medications without a medical prescription, and they describe the records that a pharmacist is required to keep for medications dispensed by prescription, including information that identifies the prescribing person and the patient. There is no evidence that pharmacists anywhere in Canada are required to keep such records for the substances in issue in this case.
I cannot accept the suggestion that, in the case of a medication that is prescribed by a physician but is purchased at a pharmacy off the shelf, a sales slip or invoice from the pharmacist would be a sufficient "recording" to meet the statutory requirement. A record in that form cannot meet the apparent function of the recording requirement. There must be a record kept by the pharmacist in his or her capacity as pharmacist. That necessarily excludes substances, however useful or beneficial, that are purchased off the shelf.
[9] In other words only prescription medicines would qualify.
[10] I would do the appellant no favour if I were to adopt a more compassionate approach, as has been done in other cases in the court, to read "as recorded by a pharmacist" as encompassing medications prescribed by a medical doctor that are sold in pharmacies but recorded simply as a sale by the pharmacist but not as a prescription drug. Such a decision would simply be reversed by the Federal Court of Appeal.
[11] The appellant also argues that the limitation of the type of medications to prescription drugs is discriminatory and is contrary to section 15 of the Canadian Charter of Rights and Freedoms. Notice of this argument was not given to the provincial attorneys general as required by section 19.2 of the Tax Court of Canada Act. The practice in this court is to hear the constitutional argument and if it has, on a preliminary consideration, some merit, to adjourn so that the required notice can be given: Lewis v. Canada, [2004] T.C.J. 145; Cavalier v. The Queen, [2002] 1 C.T.C. 2001; and Whalen v. The Queen, 2001 DTC 190.
[12] The matter was fully discussed by Bowie J. in Cavalier. I am in respectful agreement with his observation that the procedure followed by the Federal Court of Appeal in Langlois v. R., [1999] 4 C.T.C. 258, should be followed rather than the obiter dictum in Nelson v. R., 2000 DTC 6556. Section 19.2 of the Tax Court of Canada Act restricts only the sort of relief that can be given when certain types of constitutional challenges to legislation are raised. It certainly does not restrict the sort of arguments a court can hear. It restricts only what effect the court can give to such arguments.
[13] I regret that I am unable to agree with the appellant's argument that the words "as recorded by a pharmacist" constitute discrimination within the meaning of subsection 15(1) of the Charter. I agree with the view of Paris J. in Lewis, supra. Whether or not I agree with the legislative policy behind the requirement that the prescribed medication be recorded by a pharmacist, I do not think the requirement results in discrimination against the appellant or indeed anyone else on any of the grounds enumerated in subsection 15(1).
[14] The appellant's third argument is that, if the cost of homeopathic substances does not fall within paragraph 118.2(2)(n), it falls within paragraph 118.2(2)(l.9) as "remuneration for therapy provided to the patient...".
[15] I do not propose to quote the rest of the paragraph because the cost of homeopathic medicaments and herbal supplements does not, in my view, constitute "remuneration for therapy...". In the context of a provision that is remarkable for its specificity it would be strange if those words covered the cost of non-prescription nutrients and vitamins and minerals supplements, when a few paragraphs earlier a credit for drugs prescribed by a physician is severely limited.
[16] An interpretation of those words that is more consonant with the scheme of section 118.2 as a whole is that it refers to amounts paid to a person for rendering the service of providing therapy such as physiotherapy, massage therapy or psychological counseling.
[17] While "remuneration" may, in a broad sense, include payment for goods, the more usual use of the word is to denote a payment for services.
[18] The definition in the Oxford Canadian Dictionary of "remunerate" is:
1 reward; pay for services rendered. 2 serve as or provide recompense for (toil etc.) or to (a person).
Therapy can, in the same way, be broad enough to cover medicine, but if Parliament means drugs and medicaments it seems capable of saying so, as in paragraph 118.2(2)(n).
[19] Therapy as used in subsection 118.2(2) means something else and if Parliament uses a different word it presumably means something different - in this case physical or psychological therapy.
[20] I must, regretfully, dismiss the appeal.
Signed at Ottawa, Canada, this 6th day of May 2004.
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"D.G.H. Bowman" |
Bowman, A.C.J.
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CITATION: |
2004TCC344 |
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COURT FILE NO.: |
2003-4149(IT)I |
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STYLE OF CAUSE: |
Arthur Herzig and Her Majesty The Queen |
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PLACE OF HEARING: |
Toronto, Ontario |
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DATES OF HEARING: |
April 26, 2004 |
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REASONS FOR JUDGMENT BY: |
The Honourable D.G.H. Bowman, Associate Chief Justice |
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DATE OF JUDGMENT AND REASONS FOR JUDGMENT: |
May 6, 2004 |
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APPEARANCES: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Brent E. Cuddy |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |