REASONS
FOR JUDGMENT
Woods J.
[1]
This appeal concerns a disability tax credit
(DTC) claimed by Leslie McDermid with respect to her son and daughter who have
been diagnosed with learning disabilities. At the time of the hearing, the son
was 12, the daughter was 8, and both attended a private school for children
with learning disabilities. The Minister of National Revenue disallowed the DTC
claims by way of Notices of Determination dated August 23, 2012.
[2]
Ms. McDermid is a former Montessori teacher who gave
up teaching due to the extraordinary needs of her four children. Ms. McDermid’s
spouse, Scott, works part-time in order to assist. According to the testimony
of a psychologist who assessed the children for learning disabilities, the
McDermids are remarkable parents who have provided their children with
tremendous support.
[3]
At the hearing which was conducted over two days,
Mr. McDermid represented his spouse and provided the main testimony on her
behalf. Mr. McDermid also has a learning disability and was assisted at the
hearing by Rick Moore, who has a son with a learning disability.
[4]
The Crown subpoenaed two medical practitioners
who had signed certificates in this matter, Dr. Emily Piper and Dr. Richard
Horner.
Background
[5]
The DTC in section 118.3 of the Income Tax
Act provides a credit against tax that is intended to offset extra expenses
that individuals with severe physical or mental impairments would be expected
to incur.
[6]
In 2012, Ms. McDermid applied for the DTC on the
basis that her son and daughter met the criteria from birth by reason of having
marked restrictions in their mental functions.
[7]
The relevant statutory requirements are:
a) the impairment is severe,
b) the impairment is prolonged, in the sense of lasting for at least 12
months,
c) the person is unable, all or substantially all of the time, to
perform the mental functions necessary for everyday life, or can only do so by
taking an inordinate amount of time, and
d) a medical doctor or psychologist has certified in prescribed form
that the above conditions are satisfied.
[8]
In this case, the certificate requirement is not
in issue. Having a positive certificate is not the end of the matter, however.
The Court must also be satisfied that the certificate is correct.
Analysis
[9]
I begin with the general principles to be
applied in interpreting this provision as set out by Bowman J. in Radage v
The Queen, 96 DTC 1615 (TCC). Radage dealt with an older version of
the DTC, but many of the former Chief Justice’s comments remain true. Of
particular relevance here are two general principles:
- the provisions should be
construed liberally, humanely and compassionately and not narrowly and
technically, and
-
the impairment must be of such a severity that
it renders the person incapable of performing such mental tasks as will enable
him or her to function independently and with reasonable competence in everyday
life.
[10]
Based on the assumptions of fact stated in the
Reply, it appears that the Minister relied in large part on information given
by Dr. Piper in a supplementary form. In accordance with Dr. Piper’s responses,
the Minister concluded that the children were capable of performing mental
tasks except when under stress. Therefore, the Minister concluded that mental
functions were not severely impaired all or substantially all of the time.
[11]
In Mr. Moore’s cross-examination of Dr. Piper, he
took aim at the form that the Minister relied on, and in particular the
check-the-box format. In the questioning, Mr. Moore suggested that the form did
not fit the circumstances in this case, and that it gave a misleading picture
of the children’s disabilities.
[12]
To illustrate Mr. Moore’s argument, I reproduce
below one of the questions in the form, which is similar in style to several
others.
Which
statement describes your patient’s ability to perform the basic skills of daily
living (e.g., managing personal hygiene, or playing with peers)? Your patient:
a)___
is able to perform these skills at an age-appropriate level.
b)___
requires assistance or takes an inordinate amount of time to perform them, but
ONLY with complex tasks (e.g., completing homework), during periods of
exacerbation or in stressful situations.
c)___
requires continuous assistance or takes an inordinate amount of time to perform
them all or substantially all of the time, 90% of the time.
[13]
Dr. Piper checked b) to this question and
similar ones in the form. When asked on cross-examination why she ticked this
box, she testified that she had trouble with the form and assumed that c)
applied only if the child is essentially unable to perform any basic
activity of daily living. She thought that the check-the-box choices were extreme
– (a) is no disability, (b) is a moderate disability, and (c) requires
continuous assistance.
[14]
I agree with Dr. Piper’s interpretation of the
form, and I agree with the suggestion of Mr. Moore that the check-the-box
format can give a misleading picture of the disability.
[15]
The legislation does not require a severe
impairment with respect to all daily activities. It merely requires that mental
functions be severely impaired all or substantially all of the time. For
example, a child may qualify for the DTC with a severe impairment with respect
to remembering, and yet be able to eat and dress herself. To qualify, it is not
necessary that the child be unable to perform any activity on her own.
[16]
In my view, the Minister’s reliance on this form
was misplaced and Dr. Piper’s answers to these types of questions should be
disregarded.
[17]
I turn now to other evidence with respect to the
children’s impairments.
[18]
Both children were given psychoeducational
assessments by Dr. Piper and were found to have learning disabilities. The son
was assessed in 2008 and again in 2010. The daughter was assessed in 2012. In
addition, Dr. Piper filled out the DTC certificates in 2012.
[19]
Dr. Horner, the family doctor, also filled out a
DTC certificate, but his assessment was not detailed enough to be helpful in
this proceeding.
[20]
In 2010, Dr. Piper assessed the son (age 9 at
the time) as having improved in many areas since the prior assessment in 2008.
However, at age 9 the son continued to score very low in written language
skills and auditory working memory. The auditory working memory problem made it
difficult for the son to remember anything in sequence. Instructions needed to
be kept very simple. The problem was illustrated by the son not being able to
remember a coach’s instructions on a soccer field. I would also note that,
based on a report by the son’s teacher, Dr. Piper concluded that the son had
attention problems “high enough to warrant concern,
although sub clinical.”
[21]
In 2010, Dr. Piper assessed the daughter (age 7
at the time) as having low academic scores which evidenced a learning
disability which could not be specified at her young age. It was also noted
that the daughter had significant difficulties with stress. As for reports from
the daughter’s teacher, all scores were within the normal range.
[22]
The testimony of the parents is particularly
important in a case such as this because they are uniquely aware of the
children’s daily routine. (See also Bowman C.J. in McNaughton v The Queen,
2005 TCC 714, at para. 9.)
[23]
Mr. McDermid gave the most detailed testimony.
With respect to his son, Mr. McDermid described that significant parental
supervision was required for a broad range of activities, including the morning
routine before school and social activities. With respect to his daughter, the
evidence suggested that she needed support to help with anxiety and that she
was a slow learner.
[24]
Based on the evidence as a whole, I am persuaded
that the son’s disability qualifies for the DTC, mainly due to the auditory
working memory problem which required significant parental support. With
respect to the daughter, I find that the evidence was not persuasive that her
impairment in daily activities was severe enough to qualify for the DTC. Of
course, this may change as the daughter becomes older and her daily activities
become more complex.
[25]
In light of these conclusions, the appeal will
be allowed, but only with respect to the son’s disability. It remains to be
considered which taxation years are affected.
[26]
Ms. McDermid applied for the DTC for her son
since birth. There is not a sufficient evidentiary basis to grant the DTC for
years prior to the first assessment conducted by Dr. Piper in 2008. The son was
in grade 1 at this time.
[27]
In the result, the Minister’s determination with
respect to the son will be referred back for re-determination on the basis that
the son’s disability qualifies for the DTC for taxation years beginning in
2008.
[28]
In light of mixed success, each party shall bear
their own costs.
Signed
at Toronto, Ontario, this 3rd day of September 2014.
“J. M. Woods”
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