Citation: 2010 TCC 604
Date: 20101125
Docket: 2009-3018(IT)I
BETWEEN:
CHARLOTTE W. POEHLKE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Bowie J.
[1] Ms. Poehlke purports to appeal from income tax
reassessments for the taxation years 1999 to 2008 inclusive. At the opening of
the hearing counsel for the respondent moved to quash the appeals for the
taxation years 1999 to 2003 and 2008. The evidence before me showed that the
appellant had been reassessed, and received refunds of tax, in respect of the
years 1999, 2000, 2001, 2002 and 2003 under the provisions of subsections
152(4.2) and 164(1.5) of the Income Tax Act (the Act).
Subsection 165(1.2) provides that a reassessment made under subsection 152(4.2)
may not be the subject of a notice of objection, and it therefore cannot be
appealed from, by reason of the opening words of subsection 169(1). The
evidence also showed that the appellant had not filed a notice of objection
with respect to the 2008 taxation year, and so she is unable to appeal from
that assessment as well. I therefore must quash the appeals for the taxation
years 1999 through 2003 and 2008.
[2] The appeals for
2004, 2005, 2006 and 2007 are properly before the Court, and they were heard on
October 28, 2010 under the informal procedure. They are concerned with the
appellant’s claim that she is entitled to a disability tax credit in each of
those years in respect of her younger son. The entitlement to the credit in question
arises under sections 118.3 and 118.4 of the Act. The relevant parts of
those sections were amended by S.C. 2006, c. 4 s. 63(2) applicable to the 2005
and later years. Ms. Poehlke’s appeal for the year 2004 is therefore governed
by the pre-amendment provisions, and her appeals for 2005, 2006 and 2007 are
governed by the post-amendment provisions.
[3] For convenience,
subsections 152(4.2), 164(1.5), 165(1.2), 169(1) and the relevant parts of
sections 118.3 and 118.4 before and after the amendment are reproduced as an
appendix to these Reasons.
[4] The evidence
before me, insofar as it relates to the disability claim, consists of the oral
testimony of the appellant, and certain documents that were identified by an
officer of the Canada Revenue Agency Disability Tax Credit Unit. These are a
Disability Tax Credit Certificate (“DTCC”) in respect of the appellant’s
younger son, completed by Dr. M.G. Frey, a questionnaire completed by him at
the request of the Agency, and a Psycho-Educational Report completed by Maryam
Naser, a School Psychologist for Richmond School District No. 38. By reason of
subsection 118.3(4) of the Act, the questionnaire is deemed to be part of Dr.
Frey’s DTCC.
[5] To succeed in
these appeals, the appellant must show that her son suffered from a prolonged
impairment that made him unable to perform a basic activity of daily living, or
caused him to require an inordinate amount of time to do so. Prolonged means an
impairment that can reasonably be expected to last for a continuous period of
at least 12 months.
The Act defines the term “basic activity of daily living” in paragraph
118.4(1)(c). For 2004 the definition that is relevant to these appeals is
“perceiving, thinking and remembering.” By reason of the 2006 amendment to the Act,
the relevant definition for the taxation years 2005, 2006 and 2007 is “mental
functions necessary for everyday life,” and these are defined by paragraph
118.4(c.1) to include;
(i)
memory,
(ii)
problem solving, goal setting and judgment (taken together) and,
(iii)
adaptive functioning;
The
respondent’s position is that the evidence does not establish that the
appellant’s son’s condition satisfies the test, either before or after the 2006
amendment. It is not disputed, however, that if his condition does meet the
test then it can reasonably be expected to last for a continuous period of at
least 12 months.
[6] Dr. Frey’s
initial opinion, expressed on the Minister’s form T2201, is cryptic. He
Indicated that the patient is markedly restricted in performing the mental functions
necessary for everyday life, and has been since birth. He added that the
patient needs learning assistance at school, and summarized his opinion by
stating that he is a student with a mild intellectual disability. In completing
a questionnaire in August 2008, which must be read as part of the original form
T2201, he said that the patient can perform the daily living skills expected at
his age, and he can make age-appropriate decisions and follow instructions. He
has the ability to socialize with his peers, and has no severe memory deficit.
He does not require an inordinate amount of time to perform the mental
functions required for everyday living. His disabilities, according to Dr.
Frey, relate to school and academic achievement, and are not behavioural. He
ends his opinion by stating that the patient should be able to finish school
and live independently, and that he suffers from a mild intellectual
disability.
[7] Ms. Naser’s
Psycho-Educational Report is not inconsistent with the whole of Dr. Frey’s
opinion. It is more detailed, consisting of 10 pages followed by three pages of
test results. It indicates that the appellant’s son has poor skill levels in
verbal communication and mathematics, but that his processing speed in
performing cognitive tasks and his visual memory skills are within the average
range. She describes him as a student with a mild intellectual disability, and
recommends a modified school program designed to meet his learning needs. She
says that he would benefit from learning activities that focus on such concepts
as time, money and measurement.
[8] On the basis of
this evidence, I cannot conclude that the appellant’s son in 2004 was unable,
or required an inordinate amount of time, to perceive think or remember, or
that in 2005, 2006 or 2007 he lacked the mental functions necessary for
everyday life as they are defined in the Act. I therefore must dismiss
the appeals.
Signed at Ottawa, Canada, this 25th
day of November, 2010.
“E.A. Bowie”
152(4.2) Notwithstanding
subsections (4), (4.1) and (5), for the purpose of determining, at any time
after the end of the normal reassessment period of a taxpayer who is an
individual (other than a trust) or a testamentary trust in respect of a
taxation year, the amount of any refund to which the taxpayer is entitled at
that time for the year, or a reduction of an amount payable under this Part by
the taxpayer for the year, the Minister may, if the taxpayer makes an
application for that determination on or before the day that is ten calendar
years after the end of that taxation year,
(a) reassess
tax, interest or penalties payable under this Part by the taxpayer in respect
of that year; and
(b) redetermine
the amount, if any, deemed by subsection 120(2) or (2.2), 122.5(3), 122.51(2),
122.7(2) or (3), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account
of the taxpayer’s tax payable under this Part for the year or deemed by
subsection 122.61(1) to be an overpayment on account of the taxpayer’s
liability under this Part for the year.
164(1.5) Notwithstanding
subsection 164(1), the Minister may, on or after mailing a notice of assessment
for a taxation year, refund all or any portion of any overpayment of a taxpayer
for the year
(a) if the
taxpayer is an individual (other than a trust) or is a testamentary trust and
the taxpayer’s return of income under this Part for the year was filed on or
before the day that is ten calendar years after the end of the taxation year;
(b) …
165(1.2) Notwithstanding
subsections 165(1) and 165(1.1), no objection may be made by a taxpayer to an
assessment made under subsection 118.1(11), 152(4.2), 169(3) or 220(3.1) nor,
for greater certainty, in respect of an issue for which the right of objection
has been waived in writing by the taxpayer.
169(1) Where a taxpayer has
served notice of objection to an assessment under section 165, the taxpayer may
appeal to the Tax Court of Canada to have the assessment vacated or varied
after either
(a) the Minister has confirmed the
assessment or reassessed, or
(b) 90 days
have elapsed after service of the notice of objection and the Minister has not
notified the taxpayer that the Minister has vacated or confirmed the assessment
or reassessed,
but no appeal under this section may
be instituted after the expiration of 90 days from the day notice has been
mailed to the taxpayer under section 165 that the Minister has confirmed the
assessment or reassessed.
BEFORE AMDENDMENT IN 2006
118.3(1) Where
(a)
an individual has a severe and prolonged mental or physical impairment,
(a.1)
the effects of the impairment are such that the individual's ability to
perform a basic activity of daily living is markedly restricted,
(a.2)
a medical doctor, or where the impairment is an impairment of sight, a
medical doctor or an optometrist, has certified in prescribed form that the
individual has a severe and prolonged mental or physical impairment the effects
of which are such that the individual's ability to perform a basic activity of
daily living is markedly restricted,
(b)
the individual has filed for a taxation year with the Minister the
certificate described in paragraph (a.2),
and
(c)
no amount in respect of remuneration for an attendant or care in a
nursing home, in respect of the individual, is included in calculating a
deduction under section 118.2 (otherwise than by reason of paragraph (2)(b.1) thereof) for the year by the
individual or by any other person,
for
the purposes of computing the tax payable under this Part by the individual for
the year, there may be deducted an amount determined by the formula
A x $4,118
where
A
is the appropriate percentage for the year.
118.3(4) Where a claim under this section or under section 118.8
is made in respect of an individual's
impairment
(a) if the Minister requests in writing information
with respect to the individual's
impairment, its effects on the individual and, where
applicable, the therapy referred to in paragraph (1)(a.1) that is
required to be administered, from any person referred to in
subsection (1) or (2) or section 118.8
in connection with such a claim, that person shall provide
the information so requested to the Minister in writing; and
(b) if the information referred to in paragraph (a) is
provided by a person referred to in
paragraph (1)(a.2), the
information so provided is deemed to be included in a certificate in prescribed form.
118.4(1) For the purposes of subsection
6(16), sections 118.2 and 118.3 and this subsection,
(a) an impairment is prolonged where
it has lasted, or may reasonably be expected to last, for a continuous period
of at least 12 months;
(b) an individual's ability to perform
a basic activity of daily living is markedly restricted only where all or
substantially all of the time, even with therapy and the use of appropriate
devices and medication, the individual is blind or is unable (or requires an
inordinate amount of time) to perform a basic activity of daily living;
(c) a basic activity of daily living
in relation to an individual means
(i) perceiving, thinking and remembering,
(ii) feeding and dressing oneself,
(iii) speaking so as to be understood, in a
quiet setting, by another person familiar with the individual,
(iv) hearing so as to understand, in a quiet
setting, another person familiar with the individual,
(v) eliminating (bowel or bladder functions),
or
(vi) walking; and
(d)
for
greater certainty, no other activity, including working, housekeeping or a
social or recreational activity, shall be considered as a basic activity of
daily living.
AFTER AMENDMENT IN 2006 (CURRENT
VERSION)
118.3(1) Where
(a) an
individual has one or more severe and prolonged impairments in physical or
mental functions,
(a.1) the effects
of the impairment or impairments are such that the individual’s ability to
perform more than one basic activity of daily living is significantly
restricted where the cumulative effect of those restrictions is equivalent to
having a marked restriction in the ability to perform a basic activity of daily
living or are such that the individual’s ability to perform a basic activity of
daily living is markedly restricted or would be markedly restricted but for
therapy that
(i) is essential to
sustain a vital function of the individual,
(ii) is required to
be administered at least three times each week for a total duration averaging
not less than 14 hours a week, and
(iii) cannot
reasonably be expected to be of significant benefit to persons who are not so
impaired,
(a.2) in the case
of an impairment in physical or mental functions the effects of which are such
that the individual’s ability to perform a single basic activity of daily
living is markedly restricted or would be so restricted but for therapy referred
to in paragraph (a.1), a medical practitioner has certified in
prescribed form that the impairment is a severe and prolonged impairment in
physical or mental functions the effects of which are such that the
individual’s ability to perform a basic activity of daily living is markedly
restricted or would be markedly restricted, but for therapy referred to in
paragraph (a.1), where the medical practitioner is a medical doctor or,
in the case of
(i) a sight impairment, an optometrist,
(ii) a speech impairment,
a speech-language pathologist,
(iii) a hearing impairment, an audiologist,
(iv) an impairment
with respect to an individual’s ability in feeding or dressing themself, an
occupational therapist,
(v) an impairment
with respect to an individual’s ability in walking, an occupational therapist,
or after February 22, 2005, a physiotherapist, and
(vi) an impairment
with respect to an individual’s ability in mental functions necessary for
everyday life, a psychologist,
(a.3) in the case
of one or more impairments in physical or mental functions the effects of which
are such that the individual’s ability to perform more than one basic activity
of daily living is significantly restricted, a medical practitioner has
certified in prescribed form that the impairment or impairments are severe and
prolonged impairments in physical or mental functions the effects of which are
such that the individual’s ability to perform more than one basic activity of
daily living is significantly restricted and that the cumulative effect of
those restrictions is equivalent to having a marked restriction in the ability
to perform a single basic activity of daily living, where the medical
practitioner is, in the case of
(i) an impairment
with respect to the individual’s ability in feeding or dressing themself, or in
walking, a medical doctor or an occupational therapist, and
(ii) in the case of
any other impairment, a medical doctor,
has certified in prescribed form
that the impairment is a severe and prolonged mental or physical impairment the
effects of which are such that the individual’s ability to perform a basic
activity of daily living is markedly restricted or would be markedly restricted
but for therapy referred to in paragraph (a.1),
(b) the
individual has filed for a taxation year with the Minister the certificate
described in paragraph (a.2) or (a.3), and
(c) no amount
in respect of remuneration for an attendant or care in a nursing home, in
respect of the individual, is included in calculating a deduction under section
118.2 (otherwise than because of paragraph 118.2(2)(b.1)) for the year
by the individual or by any other person,
there may be deducted in computing
the individual’s tax payable under this Part for the year the amount determined
by the formula
A × (B + C)
where
A is the appropriate
percentage for the year,
B is $6,000, and
C is
(a) where the
individual has not attained the age of 18 years before the end of the year, the
amount, if any, by which
(i) $3,500
exceeds
(ii) the amount, if
any, by which
(A) the total of all amounts each of
which is an amount paid in the year for the care or supervision of the
individual and included in computing a deduction under section 63, 64 or 118.2
for a taxation year
exceeds
(B) $2,050, and
(b) in any
other case, zero.
118.3(4) Where a claim under this section or under section 118.8
is made in respect of an individual's
impairment
(a) if the Minister requests in writing information
with respect to the individual's
impairment, its effects on the individual and, where
applicable, the therapy referred to in paragraph (1)(a.1) that is
required to be administered, from any person referred to in
subsection (1) or (2) or section 118.8
in connection with such a claim, that person shall provide
the information so requested to the Minister in writing; and
(b) if
the information referred to in paragraph (a) is provided by a person referred to in
paragraph (1)(a.2), the
information so provided is deemed to be included in a certificate in prescribed form.
118.4(1) For the purposes of subsection 6(16), sections 118.2
and 118.3 and this subsection,
(a) an
impairment is prolonged where it has lasted, or can reasonably be expected to
last, for a continuous period of at least 12 months;
(b) an
individual’s ability to perform a basic activity of daily living is markedly
restricted only where all or substantially all of the time, even with therapy
and the use of appropriate devices and medication, the individual is blind or
is unable (or requires an inordinate amount of time) to perform a basic
activity of daily living;
(b.1) an
individual is considered to have the equivalent of a marked restriction in a
basic activity of daily living only where all or substantially all of the time,
even with therapy and the use of appropriate devices and medication, the
individual’s ability to perform more than one basic activity of daily living
(including for this purpose, the ability to see) is significantly restricted,
and the cumulative effect of those restrictions is tantamount to the
individual’s ability to perform a basic activity of daily living being markedly
restricted;
(c) a basic
activity of daily living in relation to an individual means
(i) mental functions necessary for everyday
life,
(ii) feeding oneself or dressing oneself,
(iii) speaking so as
to be understood, in a quiet setting, by another person familiar with the
individual,
(iv) hearing so as to
understand, in a quiet setting, another person familiar with the individual,
(v) eliminating (bowel or bladder functions), or
(vi) walking;
(c.1) mental functions
necessary for everyday life include
(i) memory,
(ii) problem solving,
goal-setting and judgement (taken together), and
(iii) adaptive functioning;
(d) for
greater certainty, no other activity, including working, housekeeping or a
social or recreational activity, shall be considered as a basic activity of
daily living; and
(e) feeding oneself does not include
(i) any of the
activities of identifying, finding, shopping for or otherwise procuring food,
or
(ii) the activity of
preparing food to the extent that the time associated with the activity would
not have been necessary in the absence of a dietary restriction or regime; and
(f) dressing
oneself does not include any of the activities of identifying, finding,
shopping for or otherwise procuring clothing.
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