Citation: 2009 TCC 279
ANGELS OF FLIGHT CANADA INC.,
HER MAJESTY THE QUEEN,
REASONS FOR JUDGMENT
This case turns on the
What is an ambulance service?
The business of Angels
of Flight Canada Inc., the Appellant, is described in the company profile which
states, in part:
We are a team of medical transfer specialists dedicated to quality
patient care and safety through the coordination and delivery of our
comprehensive services worldwide.
Angels of Flight Canada Inc. is a Canadian owned and operated health
care company that has pioneered the specialization of medical evacuation
and intra-facility transportation of ill and injured persons both in Canada and around the world. Angels has
been innovative in improving safety and setting patient care and education
standards for nursing in the ambulance industry for more than sixteen years.
Angels of Flight Canada Inc. is the first Canadian company with extensively
trained Registered Nurses specializing in aeromedical and ground transportation
of ill and injured persons.
Our transport registered nurses have extensive knowledge and
experience in aeromedicine, aviation safety, wilderness and water survival,
critical care, trauma, pediatrics, orthopedics, psychiatry, palliative care and
oncology. Each of our management staff have more than twenty-five years of
experience in the management or direct delivery of patient care. Our Critical
Care Transport Teams consist of an ACLS transport registered nurse partnered
with a second nurse, physician or paramedic depending on the needs of the
. . .
Angels’ land transportation units provide non-emergency patient
transportation between healthcare facilities, from residence to facilities for treatment
or appointments, return home from hospital, to and from airports. Angels’ land
transportation units meet all Canadian motor vehicle standards and are staffed
by provincially certified paramedics and transportation registered nurses. Each
climate controlled vehicle is equipped for intra-facility medical transport
with oxygen, stretchers, radios, cellular phones, standard medical, airway and
patient comfort supplies, and has safe comfortable seating for escorts and
The company also provides some nursing services
unrelated to the transportation of patients.
The air ambulance and
nursing services unrelated to transportation are not in issue in this appeal.
What is in issue relates to the “land transportation” segment of the business described
The issue is whether
the supply of land transfer services is subject to the Goods and Services Tax
(“GST”) or whether it is an exempt supply.
More specifically, are
they exempt supplies falling within section 4 of Part II of Schedule V of the Excise
Tax Act (the “ETA”):
4. A supply of an ambulance service made by a person who carries on
the business of supplying ambulance services. . . .
Alternatively, are they
exempt supplies falling within section 6 of Part II of Schedule V of the ETA
― nursing services?
This appeal was heard
under the informal procedure. The Appellant was represented by Gail Courneyea,
President and Chief Operating Officer of the Appellant. Ms. Courneyea is a
registered nurse and a critical care nurse with very impressive experience and
training in the transport of patients. It was evident throughout the hearing
that she cares very deeply about her patients and that this commitment is
reflected in the operations of the Appellant.
testified as well as Mr. Richard Brady, Manager of the investigative unit
of the Ministry of Health and Long-Term Care of the Province of Ontario, and Ms. Joanna Palin, an audit team leader of the
Canada Revenue Agency in Peterborough.
There is no real
dispute as to the facts.
testified that the vehicles purchased by the Appellant are ambulances built by
one of the two approved manufacturers of ambulances. These vehicles look like
contemporary ambulances and are used for patient transport.
She also explained that
the vehicles were equipped with the same equipment and supplies as an ambulance
except for certain variations.
Because they do not
respond to emergencies, they do not carry certain first responder’s equipment.
She gave as examples that they did not carry eye patches or a full line of neck
braces. On the other hand, they carry certain additional equipment and supplies
that ambulances do not carry or, at least, did not carry in the years in
question. Examples she gave included glucose monitoring equipment, advance
cardiac life support equipment and additional infection control supplies (as a
result of having lived through the SARS crisis). Some of the additional
equipment or supplies are carried because they may have patients for seven or
eight hours at a time.
Exhibit A-7, the
submission made to the Lakeridge Health Corporation by the Appellant, when
tendering to provide “Private Ambulance Patient Land Transport – Non-Emergency
Transfer” services, sets out in detail the Appellant’s capabilities and lists
equipment and supplies carried.
The Appellant was
successful in obtaining the contract and Lakeridge was a significant customer
in the period in issue. The contract, at tab 12 of Exhibit R-1, states, among
Supplier agrees to sell and LHC agrees to purchase “Private Ambulance
Patient Land Transport – Non-Emergency Transfer” as detailed in Suppliers RFP
#5251 submission document.
described the Appellant’s operations as follows: 98% of the Appellant’s
transport calls originate from hospitals. The dispatchers, all nurses, are
knowledgeable and will ask questions if the hospital provides insufficient
information so as to determine if a sufficient level of care has been
requested. On occasion, they upgrade the level of care although they do not
change for a higher level of service than ordered by the hospital.
There as three levels
Level One: Basic transfer service – to and
from nursing homes and hospitals for routine appointments – 2 crew.
Level Two: 2 crew of which one is a
registered nurse providing a level of service to patients requiring nursing and
Level Three: 2 crew of which one is a
critical care registered nurse, ACLS medical equipment and drugs.
Angels’ land transportation units provide non-emergency patient
transportation between healthcare facilities, from residence to facilities for
treatment or appointments, return home from hospital, and to and from airports.
Angels’ land transportation units meet all Canadian motor vehicle standards and
are staffed by provincially certified paramedics and transportation registered
nurses. Each climate controlled vehicle is equipped for intra-facility medical
transport with oxygen, stretchers, radios, cellular phones, standard medical
equipment, airway and patient comfort supplies, and has safe comfortable
seating for escorts and family.
Level one was very rare in the period in question.
There is always at least a paramedic. In level two, there is a nurse and in
level three, a critical care nurse. When there is a nurse, the driver might be
a paramedic or a firefighter with some medical training.
When a patient is
transferred from one hospital to another, or sent out for a test and brought
back to the originating hospital, the sending hospital is responsible for the
nursing care of the patient until the patient is taken over by the receiving
hospital or, in the case of a test, until the patient returns to the
originating hospital. If the originating hospital transferred the patient on an
ordinary ambulance, it would have to send a nurse with the patient.
By using the
Appellant’s services, the originating hospital is not obliged to send one of
its own nurses ― in
addition to the patient benefiting from the specialized training and knowledge
of the Appellant’s nurses in patient transport.
views the services provided by the Appellant as nursing care. The Appellant’s
activities are carried out in accordance with the guidelines of the College of Nurses of Ontario. At one point,
she likened what they did to providing a hospital on wheels.
In a level two or three
service relating to a test, for example, the nurse sent out will go to the
patient’s room in the originating hospital, check the patient’s chart, satisfy
herself or himself that everything is in order and accompany the patient from
his or her room to the vehicle, then to the other facility and back again to
the patient’s room. If, while at the other facility, the patient needs
prescription drugs, it is that nurse who will administer those drugs.
On meeting the patient, the nurse
might discover, for example, that the patient had a fever which would not
prevent his or her transport but that would result in the facility scheduled to
do the test not doing it, with the result that the transfer would be cancelled
in order to avoid an unnecessary journey.
Ms. Courneyea agreed that the
Appellant did not have an ambulance service license from the Ontario
She also agreed that they did not
respond to emergencies. The patients transported by the Appellant are stable at
the time of the move, but there is always a risk of problems arising.
Separate invoices are sent for
every patient. Most moves are paid for by the hospital; in rare cases the
She agreed that on one occasion they
had taken a palliative care patient to a Shania Twain concert in Ottawa. The
whole family including two young children attended the concert and met Shania
Twain backstage. The patient died 36 hours later. Ms. Courneyea
agreed they did a number of such calls ―
all for free.
The billing structure was set up
to charge more for levels two and three services with a nurse than for level
one service without a nurse.
Mr. Brady testified as to the
role of his ministry which regulates ambulances and which ensures compliance
with the regulations. The Ministry pays 50% of the approved costs of
He spoke about a number of
standards set by the Ministry with respect to ambulances and paramedics.
While private transfer companies
are permitted, he stated that they are not ambulances because they are not
At one time, ambulances did many
more of the moves of patients between hospitals or for tests but because of the
growing demand for ambulances to respond to emergencies, there is growing use
of private transfer services for non-emergency transport.
Ms. Palin testified about the
audit, how the output tax was computed and how the related Input Tax Credits (“ITCs”)
were determined and allowed to the Appellant.
There was no dispute as to any
issues of quantum.
Ms. Courneyea also testified
that over the years the Appellant’s accountant had inquired about charging GST
because they wanted to get back the ITCs and that the accountant had been told
verbally that they could not charge GST. They also filed a letter, written
after the years in question, signed by the accountant.
While I accept
Ms. Courneyea’s testimony that they had wanted to charge GST, the evidence
gives little detail as to exactly what information was provided and exactly
what response was given.
Ms. Courneyea also testified
that the average hospital patient is much sicker than before because hospitals
now discharge patients more rapidly.
The crucial question here is an
apparently simple one. With respect to the supplies in issue, is the Appellant
providing an “ambulance service” and carrying on the “business of supplying
On the face of it, the answer
would appear to be yes. The Appellant uses the same vehicles and has most of
the same equipment as used by ambulances responding to 911 calls. The Appellant
also has nurses or, in a few cases, paramedics accompanying the patients
throughout their journey.
The major difference between the
services in question and those supplied by ambulances responding to 911 calls
is that the Appellant does not respond to emergencies. It transfers patients
who are stable, at least at the time of departure from the hospital, on
journeys from the hospital to tests and back or in some cases from one hospital
to another. There is always the risk that the patient’s condition may change
during the trip.
The ambulances who respond to 911
calls also carry out the same kind of patient transport as the Appellant but,
at least in Ontario, they have been doing so less over time because of an
increasing demand for emergency transportation.
Neither “ambulance” nor “ambulance
service” are defined by the ETA.
Using ordinary dictionary
definitions, the Appellant certainly operates vehicles falling within the
definition of an “ambulance” and, accordingly, operates an “ambulance service”
and the “business of supplying ambulance services”. For example, the Canadian
defines “ambulance” as:
specially equipped for conveying the sick or injured to and from a hospital,
esp. in emergencies.
The Respondent argues that while a
common dictionary meaning or the plain meaning is a useful starting point, the
modern approach to statutory interpretation also requires this Honourable Court
to take a contextual and purposeful approach.
It is not clear to me how this
helps the Respondent. “Ambulance services” are within Schedule V which relates
to exempt supplies and within Part II thereof which relates to health care
services. Part II covers a fairly wide range of health related supplies by
hospitals and other (defined) health care facilities, by doctors, dentists,
nurses and others. If anything, the general context of Part II, even though it
does have a number of specific restrictions, would seem to point in favour of
using the plain meaning or dictionary definitions and considering the supplies
in issue to fall within the scope of section 4 of Part II.
The Respondent further argues that
to determine contextual meaning, one should take account of provincial
legislation relating to health care given that health care is essentially
In support of this, the Respondent cited several cases including Will-Kare,
a decision of the Supreme Court of Canada, as well as Dale and Kalef,
decisions of the Federal Court of Appeal, and North Shore Health Region,
a decision of this Court. All of these decisions support the proposition that
the Income Tax Act (the “ITA”) does not operate in a vacuum but
that it takes account of the legal meaning of words outside the ITA and
not just the plain meaning or the popular meaning.
In Will-Kare, the majority
held that “goods for sale” being well defined in law, the term “sale” must be
interpreted in accordance with general commercial law.
In Kalef, it was held that
one should look at the relevant company law to determine when an individual
ceases to be a director.
In Dale, it was held that,
in determining whether a transaction will be recognized for tax purposes, one
must look at the general law to determine the legal effectiveness of the
In Will-Kare, Kalef
and Dale, it is clear that the courts determined that Parliament
intended to refer to existing legal concepts. In the absence of specific
provisions in tax legislation, where else could one turn but to the general
The situation in this appeal is
very different from that in those three cases, and I do not see how those three
cases lead to the conclusion that Parliament intended for “ambulance service”
to be defined by provincial legislation. Indeed, the scheme of Part II of
Schedule V suggests the contrary, given that Parliament has explicitly chosen
to refer to provincial law in certain cases.
For example, in the definition of
medical practitioner in section 1, it is defined as a “. . . person who is
entitled under the laws of a province to practise the profession of medicine or
dentistry”. Similarly, paragraph (b) of the definition of “practitioner”
in section 1 makes specific reference to licensing under provincial law. If
Parliament had meant to restrict section 4 of Part II of Schedule V, one would
expect a specific reference to persons authorized to operate an ambulance
service under provincial or territorial laws.
The Respondent also relied on the
decision of this Court in North Shore. In North
Shore, one of the questions before
Bowie J. was whether a facility known as the Kiwanis Care Centre was a “public
hospital” or not. On the facts he found that the facility did not provide the
patients with a high degree of complex medical care and that what was provided consisted
of varying levels of assisted living with the availability of nurses to
dispense medication and provide relatively routine medical assistance.
In North Shore, the Appellant argued, inter alia, that the
Court should consider dictionary definitions which took a wide view of
“hospital”. The Respondent notes the following portion of the decision in North
my view, dictionary meanings are of little help in this case. Subject to a few
exceptions that are not relevant here, the jurisdiction to regulate hospitals
is provincial, and in British Columbia, as elsewhere, there are a number of
enactments for that purpose. Principal among them is the Hospital Act. .
Respondent went on to note that the Court found that under the laws of British Columbia
the Kiwanis Care Centre was not operating a hospital before concluding on this
conclusion on this branch of the case, then, is that the Centre is not a
hospital under the general law of British Columbia. This conclusion is
consistent, in my view, with the ordinary meaning of the word hospital in
common contemporary Canadian usage. . . .
The Ambulance Act of Ontario defines
“ambulance” and “ambulance service” as follows:
1. (1) In
. . .
means a conveyance used or intended to be used for the transportation of
suffered a trauma or an acute onset of illness either of which could endanger
their life, limb or function, or
(b) have been
judged by a physician or a health care provider designated by a physician to be
in an unstable medical condition and to require, while being transported, the
care of a physician, nurse, other health care provider, emergency medical
attendant or paramedic, and the use of a stretcher; (“ambulance”)
service” means, subject to subsection (2), a service that is held out to the
public as available for the conveyance of persons by ambulance; (“service
Section 8 of the Ambulance Act
prohibits a person from operating an ambulance service unless he or she holds a
certificate issued by the Ontario government.
The Respondent also argues that a
person can only be supplying ambulance services if he or she holds a
certificate to do so.
I am unable to agree with this
last point as phrased. Whether or not the Appellant supplied “ambulance
services” depends not on whether a certificate was issued by the Ontario
government but on whether the term, as used in the ETA, has the same
meaning as in the Ambulance Act.
When I initially looked at the
first branch of the definition of “ambulance” in the Ambulance Act,
paragraph 1(1)(a) cited above, I thought that the Appellant appeared to
fall within that branch. However, on further examination of the whole
definition including the second alternative branch, I concluded that paragraph
1(1)(a) has to be read as requiring a certain immediacy of the trauma or
acute onset of illness that does not exist in the Appellant’s operations since
it transports patients who are stable ― at
least as of the time of departure.
Here we have an Appellant using
the same type of vehicles as those falling under the Ambulance Act,
carrying substantially similar equipment with some variation, using highly
trained nurses and, very occasionally, a paramedic without a nurse,
transporting patients that ambulances licensed by the province also transport
in similar non‑emergency circumstances.
Did Parliament intend to exclude the Appellant’s service simply because it does
not respond to emergency calls?
What is the effect of North Shore? While it is clear that this
Court put significant weight on provincial law, it did not, in my view, hold
that in the area of health care provincial definitions of health care terms are
always determinative of the meaning of the ETA terms in Part II of
Schedule V. This is clear from the following passage of the decision:
29 . . . This
conclusion is consistent, in my view, with the ordinary meaning of the word
hospital in common contemporary Canadian usage. . . .
course, if specific reference is made to provincial law, then the provincial
law will be determinative to the extent provided for.
What I take from North Shore
and from the jurisprudence is that one should give great weight to provincial
laws but “ambulance service” in Part II of Schedule V of the ETA is
not defined by provincial law.
Accordingly, it is relevant in
this case to consider the nature of the requirements imposed by provincial law
on ambulances with respect to vehicles, equipment and supplies carried and with
respect to the training of staff. These are all relevant considerations as to
the contemporary meaning of “ambulance” and “ambulance service”.
The Respondent expressed concerns
that not following provincial legislation might open up “ambulance service”
unduly widely. I do not think this concern is warranted. For example, a nurse
accompanying a patient with an IV, whether in a standard car or in a standard
van with a stretcher and little equipment, would not constitute the provision
of an ambulance service.
However, where, as is the case
here, there is a highly equipped vehicle of the same sort as used for 911
calls, with very well trained professionals, this falls within “ambulance
service” in Part II of Schedule V.
While I have no doubt that the
Appellant provided nursing services in the course of transporting the vast
majority of the patients, in view of my conclusion on the issue of “ambulance
service”, it is unnecessary for me to consider whether the land transportation
described above constitute nursing services.
As a result, the appeal of the
assessment for the period from December 1, 2002 to May 31, 2005 will
be allowed with costs in the amount of $600, and the matter will be referred
back to the Minister of National Revenue for reconsideration and reassessment
on the basis that the supplies in issue were exempt supplies.
Signed at Ottawa, Canada, this 22nd day of May 2009.