Citation: 2008TCC565
Date: 20081008
Docket: 2007-4012(IT)I
BETWEEN:
ALEX VITA-FINZI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Hershfield J.
[1] The Appellant
included school tuition fees paid in 2005 and 2006 for his daughter to attend a
private school (the “Private School”), as “medical expenses” in the computation
of the gross non-refundable tax credit in each of those years. The claim was
denied on the basis that such fees were not “medical expenses” as defined in subsection
118.2(2) of the Income Tax Act (the “Act”). The Appellant
asserts that they are medical expenses as defined in paragraph (e) of
that subsection.
[2] Paragraph (e)
of subsection 118.2(2) includes as a medical expense of an individual an
amount paid:
(e) for the care, or the care and training, at a
school, institution or other place of the patient, who has been
certified by an appropriately qualified person to be a person who, by reason of a
physical or mental handicap, requires the equipment, facilities or personnel
specially provided by that school, institution or other place for the care, or
the care and training, of individuals suffering from the handicap suffered by
the patient;
[3] The Respondent’s
denial of the Appellant’s claim is based on the assertion that three of the requirements
set out in this definition have not been met, namely: the handicap requirement,
the care and training institution requirement and the certificate requirement.
Facts
[4] Three witnesses
testified at the hearing: the Principal of the Private School; a Peel District
School Board coordinator of special education (“the Special Ed. Coordinator”);
and the Appellant. Their evidence supports the following findings of fact:
·
The Appellant’s
daughter suffered from a learning disability as a result of a developmental
handicap;
·
She entered
the public school system in grade one in 2003 but was pulled out of the school
in the second part of that first year due to parental dissatisfaction with the
progress the child was making and their view that the school had not adequately
assessed her needs and that she was thereby not receiving the special attention
she needed;
·
She was
then registered at a different school but due to continuing parental concerns
and dissatisfaction with the ability of that school to provide the proper
educational facilities for the special needs of their daughter, she was moved, after
completing grade two, to a third school, namely, to the Private School;
·
She
met the general admission standards of the Private School where she was
provided special attention on a regular daily basis;
·
She
progressed beyond the level of performance that might have been achieved had no
special attention been so well provided;
·
The
general student body of the schools attended by the Appellant’s daughter,
including, in particular, the Private School, was comprised of children who
were not special needs children requiring special care or training. Indeed, of
the general student body population of the Private School of some 250, only some
35 children would, in the normal course, be identified as requiring, and be
given, special attention;
·
There
was only one specially trained special education teacher at the Private School
for the 35 or so children who needed and received special help on a daily
basis. There were no special classrooms for these children receiving special
attention;
·
The
parents were satisfied, indeed convinced, that the Private School’s special
education program was superior to that of other schools and was responsible for
their daughter’s considerable academic progress;
·
While
the Crown objected to the admission of the Psychological Assessment Report of
Dr. Estes Moustacalls, a child psychologist, who had a session with the parents
and did individual testing on their daughter on four occasions in early 2005,
both parties relied on different portions of it;
·
The
tuition expenses at issue in this appeal are those paid to the Private School
for the Appellant’s daughter’s third grade education. Both parties have
approached the appeal on the basis that such tuition fees could not be broken
down to identify an allocable amount as a medical expense.
Issues
[5] The following are
the issues to be dealt with:
·
Whether the child
suffered a physical or mental handicap that required the facilities or
personnel specifically provided by the Private School as required by paragraph
118.2(2)(e); and
·
Whether the school was
a place that provided the Appellant’s daughter with the facilities or personnel
required for the training of a person suffering the particular handicap
(assuming that handicap was a qualifying handicap).
·
Whether the certificate
requirement set out in paragraph 118.2(2)(e) has been met; i.e. whether
the Psychological Assessment Report satisfies this requirement;
Analysis
[6] There was nothing
in the testimony of the witnesses that would dissuade me from finding that the Appellant’s
daughter suffered from a learning disability due to a developmental handicap and
that the Private School provided special facilities and personnel to address
that handicap. As well, nothing in their testimony dissuades me from finding
that the other schools she attended, including the public school she attended
at no cost, provided special facilities and personnel to address that handicap.
However, I do not see such findings as being relevant. That the Appellant’s
experience led him to believe that the other schools his daughter attended did
not have adequate facilities and personnel to provide the special resource
teaching required by his daughter, is not relevant either in my view. That the Special
Ed. Coordinator might have been correct in her testimony that comparisons
between the apparent success of one program, versus the apparent inadequacy of
the other, do not tell the story accurately (since each school was working with
the child at a different age and stage of learning development), is not
relevant. Her view that the preliminary grade one program assessments of the Appellant’s
daughter were in line with what might have been expected and that in due course
her special program needs would have been more fully recognized and addressed
by the public school’s facilities and special resource teachers, is also not
relevant.
[7] Indeed, in my view,
no comparisons are relevant except to say that if I am satisfied that the
public school special education facilities and personnel meet the requirements
of the subject provision then I would have to conclude that the Private School
met those requirements and vice versa as I am satisfied that there are
essentially corresponding facilities and personnel at both schools. That one
particular school, such as the Private School, may have a smaller population
affording more one-on-one time with a student and may boast of better success with
learning challenged children would not generally be sufficient to distinguish
that school. To distinguish a particular school might require, for example, a
special focus on learning disabled children or children with certain mental
developmental issues. I am satisfied that the Private School had no such
special focus. That some 35 children of a population of some 250 are identified
as requiring, and are given, special attention does not in my view point to the
type of focus that might distinguish that facility.
[8] On the other hand,
the subject provision does not expressly require that the school or
institution have any particular focus. The provision simply requires that
facilities and personnel be provided for the care and training required by the
person suffering the mental handicap. Arguably, all the schools that the Appellant’s
daughter attended, including the Private School, have met this requirement.
[9] The Federal Court
of Appeal has in effect considered the issue of focus and determined that where
an institution does not provide medical services (care and training provided
because of a handicap suffered by a patient) as a main focus, the expense
incurred for the service is not a medical expense for the purposes of paragraph
118.2(2)(e) of the Act.
[10] In its very recent
decision, Her Majesty the Queen v. Debbie Scott, the Federal Court
of Appeal considered the case of tuition paid at a private school that provided
children with learning disabilities, special attention in terms of personnel
trained to work with the particular needs of such children. The facts of that
case cannot, in my view, be distinguished in any material way from the facts of
the case before me. In that case, applying the reasoning in Lister v.
Canada
the Federal Court of Appeal remarked as follows:
[15] The type of institution that provides special care for the purposes
of paragraph 118.2(2)(e) was addressed by this Court in Lister (ibid.). In Lister, where it was held that
the test is one of purpose, our Court disallowed the deduction of expenses for
a seniors’ residence on the basis that provision of medical services was incidental
to accommodation services provided by the
residence.
[16] …
(…) However, given the context of subsection 118.2(2), an organization
that functions mainly as a provider of residential accommodation should not
fall within the scope of paragraph 118.2(2)(e) merely because it
incidentally provides some medical services to its residents.
…
[18] The fact that some of the services
offered to the general student body were beneficial to the respondent’s son and
other students with special needs is insufficient to bring Rothesay [the
private school] within the ambit of the provision under study.
[11] I see no reason not
to apply this finding to the case at bar. Indeed, seeing no material basis upon
which to distinguish that case from the one at bar, I am bound to follow it.
Clearly, the special education assistance provided by the Private School was
incidental to its regular academic program. There were no separate classrooms
or physical facilities for the relatively few special needs children enrolled
in the school. The Appellant’s daughter met the general admission standards and
the tuition fee paid was no different than that paid by students who did not
require special attention. In this setting, the tuition expense incurred cannot
reasonably be found to be “for” the special care and training of the Appellant’s
daughter. It was for the entire academic program.
[12] While that is
sufficient reason to dismiss the appeal, I will go on to consider briefly whether
the additional requirement for the allowance of the medical expense has been
met, namely whether Dr. Moustacalls’ Psychological Assessment Report (the
“Report”) meets the certificate requirements set out in the subject provision.
[13] On the question of
certification, the Federal Court of Appeal in Scott, above, had
this to say after acknowledging that there
is no requirement that certification be in a particular format.
[23] However
there must be true certification: one which specifies the mental or physical
handicap from which the patient suffers, and the equipment, facilities
or personnel that the patient requires in order to obtain the care or training
needed to deal with that handicap: Title Estate v. Canada [2001] F.C.J.
No. 530 at paragraph 5.
…
[14] In Scott, the
respondent’s son’s pediatrician testified as to a number of disorders suffered
by her son that, in his professional view, would result in the respondent’s son
having great difficulty in school. He recommended his attendance at schools,
like the one chosen, that he knew of as being beneficial for children like the
respondent’s son. He testified that he would recommend the particular school in
question as a suitable school setting for the treatment of the respondent’s
son’s learning and behavior disorders due to the teacher/student ratio, more
accessibility to teacher assistance, and improved organization and study habits
through daily meetings.
[15] The Court expressed the view that this “recommendation”
did not amount to certification.
Furthermore, this recommendation was found to have been made ex post facto
before the Tax Court of Canada. For the purpose of paragraph 118.2(2)(e)
of the Act, certification is clearly a pre-condition to qualifying a
disbursement as a medical expense and must be made before the expense is
incurred.
[16] In the case at bar
there is the written Report, a written diagnosis of a Ph.D in child psychology,
of a child’s learning disorder which cannot in my view be seriously challenged.
The Report, although admitted contrary to a strict application of the hearsay
rule and given without expert qualification and without affording the
Respondent a cross examination opportunity, on its face appears very thorough and
might well be considered as adequate to stand as a certification for the
purposes of the subject provision of the Act. Unlike in Scott, the
Report was prepared before the subject expenses were incurred and appears to
meet the certification requirements laid down in Title Estate.
[17] The Report does specify the mental handicap from which the patient
suffers, identifying various areas where her abilities were in the “developmentally
handicapped” range that would, in Ontario classification terminology, be the same as a
“developmental disability”. As well, it sets out, in considerable detail,
program modifications and pages of teaching strategies suggested as being needed
to deal with this child’s handicap in delivering an optimal learning
environment.
[18] On the other hand, the
detailed program modification and teaching strategies noted in the Report are
set out under a heading: “Recommendations”. While I do not believe that the use
of such term should necessarily distract from a finding that there has been a
certification of the “need” for certain training, there are, it seems, two
lines of thought that might encourage in this case treating the
“recommendations”, as done in Scott, as something less than the required
certification. Firstly, as noted above, the Report recognizes the potential for
the public school system to implement programs designed to address the Appellant’s
daughter’s disability. Contextually, there may be an inference that if public
schools can implement a modified teaching program, it should not be taken as the
type of program that the provision is intended to address. The inference is
that the needs to be addressed must be more than such needs. There must be a
degree of special training that surpasses that which is normally provided.
(This, perhaps, is just a variation of the focus requirement discussed above). Secondly,
the expense being considered, in context, is a “medical” one incurred “for the
care or the care and training” of a “patient” not for the expense incurred for
“training” alone - including developing essential cognitive skills in slow
learners or even mentally handicapped children. In this context, recommended
teaching strategies might well fall short of certifiable needs.
[19] It is not necessary
for me to make a finding on the certification issue in this case. However, I do
note that if the expense incurred had been one for training at a school or
institution that focused on teaching special needs children, I dare say that I would
have allowed that the Report, as submitted, was a certification for the
purposes of paragraph 118.2(2)(e) of the Act. The question is one
of degree. The less emphasis that the program puts on dealing with the special
needs of handicapped persons, the more stringent the requirements for certifications
to deal more expressly and exactingly with the express requirements of the Act.
Conclusion
[20] The three issues
identified at the outset of these Reasons cannot all be resolved in favour of
the Appellant. While I accept that the child suffered a handicap within the
scope of paragraph 118.2(2)(e)
and that the Report might in other circumstances have served adequately as the
required certification, the nexus required between the focus of the program
provided at, and the tuition paid to, the Private School, was not sufficient to
meet the requirements of paragraph 118.2(2)(e) as set out in Scott.
[21] For these reasons, the
appeal is dismissed without costs.
Signed at Winnipeg, Manitoba,
this 8th day of October, 2008.
"J.E. Hershfield"
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