Citation: 2009TCC140
Date: 20090306
Docket: 2004-2700(IT)G
2006-432(IT)G
BETWEEN:
RHONDA RAY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller, J.
[1]
The Appellant has
appealed the reassessments of her 2001, 2002 and 2003 taxation years wherein
the Minister of National Revenue (“the Minister”) disallowed a medical expense
tax credit (“METC”) for the cost of vitamins, herbs, homeopathic remedies,
organic and natural foods, health care products, bottled water, groceries and
personal care products (the “Products”) which cost totalled $9,117, $12,070 and
$10,339 respectively. A METC for the Products was disallowed on the basis that
their purchase was not recorded by a pharmacist as required by paragraph
118.2(2)(n) of the Income Tax Act (“ITA”).
[2]
The issues in these
appeals are whether:
a)
the Appellant is
entitled to claim a METC for the Products;
b)
paragraph 118.2(2)(n)
of the Act infringes the Appellant’s right to equality under section 15 of the Charter;
c)
paragraph 118.2(2)(n)
of the Act infringes the Appellant’s right to security of the person under
section 7 of the Charter.
[3]
In 2001, 2002 and 2003,
the Appellant did receive a METC for medical expenses in the amounts of $1,869,
$2,574 and $337, respectively.
[4]
The Appellant suffers from Chronic
Fatigue and Immune Dysfunction Syndrome (“CFIDS”), Fibromyalgia Syndrome
(“FMS”), and multiple chemical sensitivities (“MCS”). She was first diagnosed
with these illnesses in the latter part of 1986 by Dr. Catherine Anne Mildon.
It is not disputed that the Appellant has these illnesses nor that she has been
under the care of a medical practitioner for over 20 years. During the years
under appeal, Drs. Zazula and Koopmans attended to the Appellant. At present,
Dr. Mildon is again her physician.
[5]
The Appellant explained that in
1986, Dr. Mildon prescribed a regime of products that she was to take in order
to keep her disorders in abeyance and so that she could perform the activities
of daily living. Her regime included organic foods, foods without pesticides,
colours or dyes in them, and a regime of vitamins, herbs and homeopathic
remedies. The Appellant has continued to take these substances as her prognosis
is that she most likely will have CFIDS, FMS and MCS for the rest of her life.
[6]
In the years under appeal, the
Products were purchased from the Appellant’s naturopathic practitioner and from
health food stores. It was the Appellant’s evidence that the type and quality
of the vitamins, herbs and homeopathic remedies that she purchased from her
naturopathic practitioner were generally not available at a regular drugstore.
[7]
The Appellant stated that the
Products she takes assists her in the following areas of treatment:
1-
antibacterial, antiviral
2-
antioxidants
3-
detoxification
4-
digestive support
5-
energy support
6-
immune support
7-
pain relief
8-
probiotics
9-
vitamins, minerals for nutritional
and function support
10-
topical substances
She explained which herbal
remedies, minerals and vitamins she took for each of the categories numbered 1
to 7. It was her evidence that taking the regime of Products has helped to
maintain her immune system so that she can live an almost normal life.
[8] The Products were
prescribed and /or overseen by her medical doctor and her naturopath
practitioner.
[9] In 2001, 2002
and 2003 the Appellant’s health improved and she was able to work in the family
business, between 25-35 hours a week. However, her ability to work was and is directly
related to her ingestion of the Products. She stated that if she stopped taking
the regime of Products there would be a relapse and she would become bedridden
and would be unable to work. In fact, the Appellant did stop taking the
Products on one occasion to get ready for a blood test; and she noticed a brief
deterioration in her health.
[10] Dr. Mildon testified that she graduated from the University of Ottawa in 1969 as a medical doctor. She took
residencies in internal medicine, respiratory diseases and anatomical
pathology. She started to practice as a MD in 1970. From 1973 to 1982, while
continuing her practice, she supervised and helped to write the protocol for
bioavailability studies on many medications that were coming on the market as
part of the Ontario drug program. She explained that
bioavailability studies entail comparing a generic product with a like
substance that has a trade mark. By 1982, Dr. Mildon was recognized as a
clinical pharmacologist and a toxicologist. In 1984, she received her diploma
in occupational health and safety. She described herself as a diagnostician and
stated that she took all of these programs because she “wanted to be able to
diagnose anything and everything that walked through (her) door”.
[11] Dr. Mildon stated that she was the Appellant’s physician
from 1986 until April, 1995. She prescribed the regime of Products which the
Appellant started to ingest in 1986 and continued to ingest during the period
under appeal. However, during 2001, 2002 and 2003 Dr. Mildon was not involved
in the Appellant’s medical treatment (transcript p.107). She resumed treating
the Appellant in February 2007.
[12] On objection from counsel for the Respondent and
rulings of the court, Counsel for the Appellant was not permitted to ask Dr.
Mildon questions that would require an opinion. The basis for the ruling was
that Dr. Mildon was not the Appellant’s treating physician during the relevant
years and Dr. Mildon had not been presented or qualified as an expert witness.
Counsel for the Appellant’s request to submit an expert report to the court at
the hearing or to have the hearing adjourned so that an expert report could be
prepared and filed was denied.
[13] Rule 145(2) of the Tax Court of Canada Rules
(General Procedure) reads as follows:
(2) Unless
otherwise directed by the Court, no evidence in chief of an expert witness
shall be received at the hearing in respect of an issue unless,
(a) the
issue has been defined by the pleadings or by written agreement of the parties
stating the issues,
(b) a full
statement of the proposed evidence in chief of the witness has been set out in
an affidavit, the original of which has been filed and a copy of which has been
served on all other parties, not less than thirty days before the commencement
of the hearing; and
(c) the witness is available at the hearing
for cross-examination.
[14] I found that to allow the report to be tendered during
the hearing of the appeal would be prejudicial to the Respondent. These appeals
were originally scheduled for July 2008 and at the request of the Appellant
they had been adjourned to January 2009. As well, counsel for the Appellant was
fully aware of Rule 145 as she did file an expert report in accordance with the
rules for Dr. Harth.
[15] Dr. Manfred Harth was accepted as an expert witness to
give evidence with respect to Fibromyalgia Syndrome (FMS) and Chronic Fatigue
Syndrome (CFIDS).
[16] He described fibromyalgia as a condition of chronic
pain associated with fatigue and a non-refreshing sleep. The pain is considered
chronic if it has lasted more than three months; the pain must involve at least
three separate regions of the body; and, the patient must have at least eleven
out of eighteen tender points. He defined a tender point as a point which is
painful when pressed. The tender points are described in terms of their surface
anatomical location and were defined by the American College of
Rheumatology.
[17] Patients with FMS may have a number of associated
problems, such as migraine, irritable bowel, irritable bladder and CFIDS. As
well, mood disorders such as depression and anxiety are common in patients with
FMS.
[18] Dr. Harth stated that studies have shown that
seventy-five to ninety per cent of patients with FMS are women. The cause of
FMS is still unknown.
[19] It was his evidence that the treatment of FMS is very
expensive for both the public and private health care systems. The treatment
for FMS involves both medicinal and non-medicinal modalities. He added that
there was some evidence that “some in a group of treatments designated as
‘complementary and alternative medicine’ (CAM) may be useful”. He described the
drugs that are used to treat FMS and those other drugs that show promise in the
treatment of FMS. He said that there was clear evidence that exercise is
important in improving the function of patients with FMS. It was his opinion
that there are, at present, a number of treatments of proven efficacy, and
several in the process of development.
Issue (a) Whether
the Appellant is entitled to claim a METC for the Products?
[20] The particular provision of the Income Tax Act
(the “Act”) which is at issue is paragraph 118.2(2)(n) which reads:
(2) Medical expenses
-- 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;
[21] The Appellant
had appealed the reassessment of her 1999 taxation year on the basis that the
Minister had disallowed a METC for the cost of vitamins, herbs, organic and natural
foods, and bottled water as their purchase was not recorded by a pharmacist.
The Appellant’s appeal was allowed at the Tax Court of Canada (“TCC”). The
appeal from the TCC decision was allowed by the Federal Court of Appeal (“FCA”)
and leave was refused by the Supreme Court of Canada. In allowing the appeal
from the TCC, the FCA held that the words “as recorded by a pharmacist” could
not be ignored. Sharlow J.A. stated the following at paragraph 11:
In my view, the Tax Court Judge
erred in law when he concluded that the words "as recorded by a
pharmacist' in paragraph 118.2(2)(n) could be ignored. I understand why
he felt that those words represented an unjustifiable impediment to tax relief
for Ms. Ray. Like the Tax Court Judge, I sympathize with Ms. Ray. However, it
is not open to this Court, or the Tax Court, to disregard statutory
requirements imposed by Parliament, even if they are difficult to rationalize
on policy grounds. It is for Parliament alone to determine whether the words
"as recorded by a pharmacist" should be removed from paragraph
118.2(2)(n)[1].
[22] In
the present appeal, as in the appeal before the FCA, the purchase of the
Products was not recorded by a pharmacist.
[23] In
Ray, Sharlow J.A. described the rationale for the recording requirement
in paragraph 118.2(2)(n) as follows:
12 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.[2]
[24] Counsel for the Appellant has argued that both the TCC
decision in Breger v. Canada[3]and recent provincial legislative
initiatives have superseded the FCA decision in Ray.
[25] In Breger, certain medicinal, nutritional and
herbal supplements were prescribed by the Appellant, a medical doctor, for his
wife. The medications were dispensed and recorded by a pharmacist. McArthur, J.
agreed with the Appellant that the legislation governing pharmacists in Quebec required the pharmacist to record all medications
prescribed by a medical doctor.
[26] I disagree that the Breger
decision has any application to the present appeal. During the relevant years,
the Appellant was not a resident of Quebec; none of the Products were dispensed by a
pharmacist or recorded by a pharmacist. In fact, it was the Appellant’s
evidence that she did not purchase the Products from a pharmacy.
[27] Counsel for the Appellant
has referred to draft legislation that is before the legislature in New
Brunswick (read first time on May 20, 2008) and the Pharmacists Profession
Regulation (Alta. Reg. 129/2006) from Alberta which expand the role of
pharmacists so that they can prescribe certain medications. Both the draft
legislation and the regulations referred to by counsel are of no assistance to
the Appellant.
[28] Based on the FCA decision
in Ray, which is directly applicable to the facts in the present appeal,
the Appellant is not entitled to claim a METC for the Products.
Issue (b) Whether paragraph 118.2(2)(n) of the Act infringes the
Appellant’s right to equality under section 15 of the Charter?
[29] Section 15 of the Canadian Charter of
Rights and Freedoms (the "Charter") reads:
Equality Rights
15. (1)
Every individual is equal before and under the law and has the right to the
equal protection and equal benefit of the law without discrimination and, in
particular, without discrimination based on race, national or ethnic origin,
colour, religion, sex, age or mental or physical disability
(2) Subsection
(1) does not preclude any law, program or activity that has as its object the
amelioration of conditions of disadvantaged individuals or groups including
those that are disadvantaged because of race, national or ethnic origin,
colour, religion, sex, age or mental or physical disability.
[30] The Appellant is seeking that the METC be extended to
cover the Products. She has suggested that this can be done while still
preserving the integrity of paragraph 118.2(2)(n) by reading in the words
“may be” prior to the words “recorded by a pharmacist”, so that the last
phrase would read:
… as prescribed by a medical practitioner or
dentist and as may be recorded by a pharmacist;
[31]
The issue before me is not what the METC should provide but rather whether the
Government of Canada’s failure to allow a METC for these Products amounted to
an unequal and discriminatory denial of benefits under the Act, contrary to
section 15 of the Charter[4].
[32] The
threshold requirement under section 15 of the Charter is that the
Appellant must show that she is denied a benefit provided by the law[5].
The benefit sought in the present appeal, is a METC for the cost of vitamins, herbs,
homeopathic remedies, organic and natural foods, health care products, bottled
water, groceries and personal care products (the “Products”). This is a benefit that is not
conferred on anyone else and is not a benefit provided by the law.
[33]
In Sharifa Ali and Rose Markel v. Her Majesty the Queen[6],
the Appellants sought to claim a METC for the cost of certain herbs, vitamins
and supplements. The Appellants in that case argued that the “recorded by a
pharmacist” requirement in paragraph 118.2(2)(n) of the Act violated
their rights under subsection 15(1) and section 7 of the Charter. In
finding that subsection 15(1) had not been infringed, Ryer J.A. stated:
19 In
my view, it cannot be said that the non-inclusion of the cost of the Dietary
Supplements in the definition of medical expenses in subsection 118.2(2) of the
ITA, in general, or paragraph 118.2(2)(n) of the ITA, in particular, is
inconsistent with the purpose and scheme of the METC legislation. Rather, the
non-inclusion of that benefit is fully consistent with the purpose of only
extending the benefit of the METC to a specific enumeration of medical
expenses. Accordingly, I am of the view that the non-inclusion of the benefit
claimed by the appellants from the legislation in question does not constitute
discrimination by effect.
20 Having
reached the conclusion that the benefit sought by the appellants is not a
benefit provided by the law and that the legislative choice not to provide such
a benefit does not give rise to direct discrimination or discrimination by
effect, I am of the view that the appellants' subsection 15(1) argument need
not be further considered. In so concluding, I note that a similar conclusion
was reached by the Supreme Court of Canada in Auton, at paragraph 47:
[34]
It is my opinion that the facts in the present appeal are indistinguishable
from those in Ali.
[35]
Counsel for the Appellant argued that the FCA in Ali misplaced its focus
on the Auton decision as in that case the parents were seeking a benefit
to be created whereas in Ali, as in the present case, the METC is an
existing benefit. Counsel asserted that the Appellant is excluded from the
benefit on the basis of a personal characteristic as in Hislop v. Canada[7].
[36]
In the present appeals, the METC is similar to the legislation at issue in Auton
in that it is a partial plan[8].
The Act does not explicitly provide for or deny the credit for the Products.
The benefit that the Appellant is seeking is not offered to any taxpayers,
regardless of their personal characteristics. She is seeking a benefit to be
created.
[37]
The decision in Hislop is distinguishable from the present appeals. At
issue in Hislop was a provision which limited the ability of same-sex
survivors to obtain benefits where the deceased partner passed away prior to
January 1, 1998. The Supreme Court found that the provision limiting the
retroactivity of the benefits was discriminatory. In that case unlike the
present appeals, the benefit already existed.
[38]
In conclusion, considering all of the above, I find that the Appellant’s
subsection 15(1) Charter rights have not been infringed.
Issue (c) Whether paragraph 118.2(2)(n) of the
Act infringes the Appellant’s right to security of the person under section 7
of the Charter.
[39] In Ali, the FCA discussed section 7 of the Charter
as it applied to an income tax assessment as follows:
21 In
addition to their subsection 15(1) argument, the appellants contend that the
reassessments that denied their METC claims in respect of the "off the
shelf" Dietary Supplements have caused them anxiety or stress such that
the issuance of those reassessments has led to a real or imminent deprivation
of their life, liberty or security of the person, contrary to section 7 of the
Charter. It would be a remarkable proposition if the demonstration of anxiety
or stress at the prospect of having to pay income taxes were a sufficient basis
upon which to be excused from having to pay such taxes. Moreover, there is no
suggestion that the appellants cannot have access to the Dietary Supplements
without the METC that they have claimed.
22 In
my view, the ability to resist an income tax assessment on the basis of section
7 of the Charter has been sufficiently dealt with by Justice Rothstein at
paragraphs 29 and 30 of the decision of this Court in Mathew v. R., 2003
FCA 371 (F.C.A.), in which he stated:
[29] I will accept that the power
of reassessment of a taxpayer implicates the administration of justice.
However, I do not accept that reassessments of taxpayers result in a
deprivation of liberty or security of the person.
[30] If there is a right at issue
in the case of reassessments in income tax, it is an economic right. In Gosselin,
McLachlin C.J.C., for the majority, observed that in Irwin Toy Ltd. v.
Quebec (A.G.), [1989] 1 S.C.R. 927 at 1003, Dickson C.J.C., for the
majority, left open the question of whether section 7 could operate to protect
"economic rights fundamental to human...survival". However, there
is no suggestion in Gosselin that section 7 is broad enough to encompass
economic rights generally or, in particular, in respect of reassessments of
income tax. I am, therefore, of the view that the appellants have not
demonstrated a deprivation of any right protected by section 7 of the Charter.
[Emphasis
added.]
[40] The statements in Ali
are directly applicable to these appeals. There is no infringement of the
Appellant’s rights under section 7 of the Charter.
[41] The appeals are dismissed
with costs.
Signed at
Ottawa, Canada, this 6th day of March 2009.
“V.A. Miller”
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