Citation: 2008TCC171
Date: 20080327
Docket: 2005-3616(IT)I
BETWEEN:
LISE C. COUTURE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Boyle, J.
[1] The Appellant is
appealing reassessments of her 2003 and 2004 taxation years in which she was
denied the section 118.2 Medical Expense Tax Credit (the “METC”) in respect of
acupuncturist services received by her in Ontario in those years.
I. Facts
[2] The facts are not
in dispute. Ms. Couture was diagnosed in late 2001 with hyperthyroidism,
which is, in simple terms, an overactive thyroid gland. The diagnosis was made
by an endocrinologist to whom she had been referred by her family doctor. She
had consulted her family doctor when a chiropractor whom she was attending for an
unrelated back problem noticed an apparent swelling of her thyroid gland.
[3] Her family doctor
had, among other things, sent her for blood tests. The results of these tests
suggested the thyroid problem and for this reason the family doctor referred
her to the endocrinologist. The endocrinologist made the diagnosis and
recommended three choices of treatment, each being what Ms. Couture
described as conventional western medicine. These were (i) medication to
address the problems, (ii) radiation to inhibit or destroy some of the
thyroid’s cells, or (iii) surgery to remove all or part of the gland. Not
surprisingly, each of these has associated side effects and medical health
risks. Ms. Couture was not satisfied with the side effects and risks
associated with the three interventions suggested by the endocrinologist. She
did not pursue any of them apart from having had a preliminary iodine ingestion
test which was a necessary precursor to radiation treatment.
[4] Ms. Couture
raised with her endocrinologist the possibility of traditional Chinese medicine
or other alternative approaches to treatment of her hyperthyroidism. The endocrinologist
did not think such an approach would work for her and did not encourage it.
Ms. Couture looked into alternative methods of treatment on her own and
opted for traditional Chinese medicine and acupuncture (“TCMA”). She was aware
that TCMA treatments would not be covered by Ontario’s health insurance plan. The core
of the TCMA treatments was acupuncture treatments which she had two or three
times a week as well as herbal supplements taken daily. The TCMA therapy also included
counselling, dietary precautions, tongue examinations, Chinese pulse
examinations and occasional blood pressure tests.
[5] Ms. Couture
was treated by an eminent Canadian acupuncturist and practitioner of traditional
Chinese medicine. Professor Cedric Cheung testified at the trial.
Professor Cheung is a qualified and credentialed professor and doctor of
Chinese medicine and acupuncture in several Chinese jurisdictions. He has
40 years of clinical experience in traditional Chinese medicine and acupuncture.
He is a Vice-President of the World Federation of Acupuncture-Moxibustion
Societies, an organization recognized by the World Health Organization with
members in 72 countries including Canada. Professor Cheung is the
National President of the Chinese Medicine and Acupuncture Association of
Canada which has chapters in eight provinces including Ontario. This association, among other
things, promotes and lobbies for the regulation of traditional Chinese medicine
and acupuncture as health services in Canada. It has been successful in having
the provinces of Alberta, British Columbia and Quebec join Saskatchewan in regulating TCMA. Most recently, it
has been successful in persuading Ontario to add TCMA as a regulated health profession. Under
the new Ontario laws, the College of Traditional Chinese Medicine Practitioners and
Acupuncturists of Ontario has been created. Professor Cheung is on the
Council of that College and is under consideration to be its Vice-President.
[6] Professor Cheung
operated the Institute of Chinese Medicine & Acupuncture in London, Ontario. It was there that
Professor Cheung provided the acupuncturist services to Ms. Couture.
[7] Ms. Couture
began her treatments in January 2002 and ended them in early 2004. By the time
the treatments ended, her blood tests were consistently showing thyroid-associated
results in the normal range. Fortunately for Ms. Couture these results
have continued and it appears that her TCMA acupuncture and related treatments
were successful in largely healing her thyroid condition. At the time of the
hearing, more than three years after her treatments ended, Ms. Couture regards
herself as healed and reports that her blood tests have continued to show
satisfactory normal range readings associated with the thyroid‑related
blood tests.
[8] In her 2002 tax
return, Ms. Couture claimed the cost of her acupuncture treatments, the
related transportation costs as well as the cost of the herbal supplements.
Canada Revenue Agency did not allow her claim for the herbal supplements for
purposes of the METC in 2002. In 2003 and 2004, the years under appeal, Ms. Couture
claimed the cost of the acupuncturist services and the related transportation
costs but did not claim the cost of the herbal supplements for purposes of calculating
her METC. The amounts claimed by Ms. Couture in 2003 were $7,760 and in
2004 were $3,906. CRA has denied her 2003 and 2004 claims.
II. Position of the parties
[9] Ms. Couture is
understandably most pleased that, with two years of non‑invasive traditional
Chinese medicine and acupuncture treatments, she is healed of her
hyperthyroidism and seemingly has a normally functioning thyroid gland. Over
the two years, these treatments cost her approximately $12,000. Ms. Couture
knew when she opted for those treatments that their costs would not be covered
by Ontario’s health insurance plan.
She was not aware that they would not qualify for the METC in the Income Tax
Act and contends in Court that these expenses should and do qualify for the
METC. Among other things, she points out that (i) in the years in question acupuncturist
services qualified for METC in several other Canadian provinces which at that
time regulated acupuncturists, and (ii) since the end of 2006, Ontario has
added acupuncturists and traditional Chinese medicine practitioners to the
schedules of the Regulated Health Professions Act with the result that CRA
now accepts that acupuncturist services received in Ontario after 2006 can
qualify for the METC.
[10] Ms. Couture also points out that CRA accepted these as medical expenses in
her 2002 taxation year. This does appear somewhat odd given that CRA obviously
reviewed her claim since it disallowed her herbal supplement expenses for METC
purposes in 2002 and appears to have expressly permitted her acupuncturist
expenses. No reason was offered by the Crown for this. Unfortunately for
Ms. Couture, CRA’s assessment of an individual in one taxation year does
not in any way preclude it from reconsidering and taking a different position
in other taxation years.
[11] Ms. Couture
further points to the CRA’s unequal and more favourable treatment of Canadian
taxpayers for METC purposes under the Income Tax Act who received their
traditional Chinese medicine or acupuncture treatments in those provinces in
which it is accepted by CRA as being provided by “medical practitioners”, such
as British Columbia, Saskatchewan, Quebec and Alberta, contrasted with those
like her who received the same treatments from similarly qualified
practitioners and acupuncturists in Ontario. Specifically, she points out that,
had she traveled to British Columbia for her treatments, her expenses would
have been allowed by CRA. It is also to be noted that Professor Cheung in his
testimony indicated he met all of the credentialing requirements in those other
provinces and could have readily obtained his membership in their provincial
colleges.
[12] It is the Crown’s position that Ms. Couture’s
acupuncturist expenses did not qualify for the METC because in 2003 and 2004 Ontario did not regulate acupuncturists
and, hence, Professor Cheung was not a “medical practitioner” as defined
in subsection 118.4(2). The Crown’s Reply also takes the position that the
services in question were not “medical services” for purposes of
subsection 118.2(2).
III. Applicable Legislation
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118.2(2) For
the purposes of subsection 118.2(1), a medical expense of an individual is an
amount paid
(a) to a medical practitioner, dentist or
nurse or a public or licensed private hospital in respect of medical or
dental services provided to a person (in this subsection referred to as the
“patient”) who is the individual, the individual’s spouse or common-law
partner or a dependant of the individual (within the meaning assigned by
subsection 118(6)) in the taxation year in which the expense was incurred;
118.4(2) For the purposes of sections 63, 64,
118.2, 118.3 and 118.6, a reference to an audiologist, dentist, medical
doctor, medical practitioner, nurse, occupational therapist, optometrist,
pharmacist, physiotherapist, psychologist, or speech-language pathologist is
a reference to a person authorized to practise as such,
(a) where the reference is used in respect
of a service rendered to a taxpayer, pursuant to the laws of the jurisdiction
in which the service is rendered;
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118.2(2) Pour
l’application du paragraphe (1), les frais médicaux d’un particulier sont les
frais payés :
a) à un médecin, à un dentiste, à une infirmière ou un infirmier, à un
hôpital public ou à un hôpital privé agréé, pour les services médicaux ou
dentaires fournis au particulier, à son époux ou conjoint de fait ou à une
personne à la charge du particulier (au sens du paragraphe 118(6)) au cours
de l’année d’imposition où les frais ont été engagés;
118.4(2) Tout
audiologiste, dentiste, ergothérapeute, infirmier, infirmière, médecin,
médecin en titre, optométriste, orthophoniste, pharmacien, physiothérapeute
ou psychologue visé aux articles 63, 64, 118.2, 118.3 et 118.6 doit être
autorisé à exercer sa profession :
a) par la législation applicable là où il rend ses services, s’il est
question de services;
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IV. Analysis
A. Subsection 118.4(2): Medical
Practitioner
[13] In order for
Ms. Couture’s traditional Chinese medicine acupuncturist’s expenses to
qualify as a “medical expense” that generates a “medical expense tax credit”,
the amounts paid to Professor Cheung must be able to be considered to be
payments to a “medical practitioner”.
[14] The term “medical
practitioner” is not defined in the Income Tax Act although section
118.4(2) does place restrictions on which medical practitioners will qualify. It
was said by the Crown in argument, and it is often said, that an alternative
medical provider will only be considered a qualified medical practitioner if
the person’s particular profession is regulated as a health profession in the
province in which they provide their services. That is not entirely correct. Clearly
the language of 118.4(2) says something quite different.
[15] What subsection 118.4(2)
requires is a two-step analysis. Firstly, is an acupuncturist or trained
traditional Chinese medicine practitioner a “medical practitioner” within the accepted
meaning of that term outside the Income Tax Act? This is necessary
because acupuncturists and traditional Chinese medicine practitioners are not
described by name as are dentists, nurses, audiologists and the like. Secondly,
if an acupuncturist is a medical practitioner, does the province in which the
acupuncturist provides services authorize him or her to practise as a “medical
practitioner”? That is the clear meaning of the use of the words “authorized to
practise as such”. Notably, this distinction means that putative medical
practitioners must be authorized to practise as a “medical practitioner”. It is
not a requirement that their particular area of medical practice be regulated
by the province, although regulation may be a common form of authorization.
[16] The definition of
“medical practitioner” in the Income Tax Act is somewhat awkward. The
use of the words “as such” means the term is defined by reference to itself. If
a careful two-step analysis is not undertaken, the definition risks becoming a
circular exercise. This is also true of the French version which defines
“médecin” by reference to “sa profession”.
(1) First step: Medical Practitioner
[17] In deciding first if Professor Cheung was a
medical practitioner within the accepted meaning of that term outside the Income Tax Act,
I note that the Canada Health Act defines “medical practitioner” for the
purposes of that Act as “a person lawfully entitled to practise medicine in a
place in which the practice is carried on by that person”. The Canada Health
Act does not define the practice of medicine. This Act’s purpose is to
provide federal funding to provincial health care régimes. This definition is
not of assistance.
[18] The Ontario Interpretation Act defines “legally qualified
medical practitioner” and “duly qualified medical practitioner” for purposes of
Ontario provincial legislation as a member
of the College of Physicians and Surgeons of
Ontario. This definition effectively equates medical practitioners to medical
doctors. This definition does not apply to the federal Income Tax Act.
Any definition of medical practitioner which is limited to medical doctors cannot
be correct for Income Tax Act purposes since the Income Tax Act,
as described below, uses each of those terms differently not interchangeably.
[19] Ontario’s Medicine
Act, 1991 defines the practice of medicine for purposes of that Act as “the
assessment of the physical or the mental condition of an individual and the
diagnosis, treatment and prevention of any disease, disorder or dysfunction”.
While this language appears to be capable of broad meaning, since this Act is
the legislative authority for the Ontario College of Physicians and Surgeons, I
suspect that it is only referring to the practice of medical doctors. In any
event, this Ontario Act does not apply for the purposes of the Income Tax
Act.
[20] It is clear from the language used in the Income Tax
Act that any definition of medical practitioner or practice of medicine
that equates it, or limits it, to medical doctors cannot assist in the analysis.
Nor can any argument by the Crown that equates “medical practitioner” (médecin)
and “medical doctor” (médecin en titre) succeed.
[21] The first reason for this is that both terms “medical
practitioner” and “medical doctor” are used in the list of professional health
services in subsection 118.4(2). If they mean the same thing, one wonders why
they are listed separately. It is sensible to presume Parliament had a reason
for using two separate terms and did not intend them to be interchangeable.
[22] Secondly, it is clear from a review of the language
used in the medical expense related provisions of the Income Tax Act
that the two terms were intended to have different meanings. Specifically, the Income
Tax Act is clear that medical doctors are one subset of medical practitioners.
For instance, paragraph 118.3(1)(a.2) uses the phrase “where the
medical practitioner is a medical doctor…”. This same distinction appears
consistently in paragraph 118.3(1)(a.3).
[23] Thirdly, this is confirmed by the legislative history
of subsection 118.4(2) itself. The 1985 revisions of the Statutes of Canada
dropped the phrase “medical doctor” from the subsection 118.4(2) meaning of the
phrase “medical practitioner”. The term medical doctor was restored
retroactively and the accompanying Department of Finance Technical Notes to the
amending legislation says that the term medical doctor had been erroneously
omitted.
[24] Clearly a medical practitioner can be a person carrying
on a profession other than that of being a medical doctor for purposes of the
first paragraph of the analysis of “medical practitioner” under the Income
Tax Act as well as for purposes of subsection 118.4(2) as a whole.
[25] In fairness, CRA has not administered the Income Tax
Act to restrictively limit “medical practitioners” to “medical doctors” and
others specifically identified by profession in subsection 118.4(2). CRA has
not treated the separately identified medical practitioners such as audiologists
and nurses as a closed listing of medical practitioners. For instance, CRA
recognizes a number of types of therapists other than the named “occupational
therapists”. See, for example, CRA’s technical interpretation 2004-0091401E5
attached as a schedule to these reasons. Instead it appears, and was argued,
that CRA recognizes Ontario medical practitioners if they are regulated by Ontario’s Regulated Health Professions
Act. That Act will be considered below as part of the second stage
determination of being authorized to practise.
[26] It also cannot be that the meaning of medical
practitioners in subsection 118.4(2) is limited to the named professions.
Otherwise, the meaning would have to be amended each time a province
authorizes, or in the Crown’s view, regulates a health profession. This was not
done when other provinces began specifically regulating acupuncturists nor was
it done since 2006 when Ontario began regulating them.
[27] I am satisfied that, for purposes of the first step in
this analysis, an Ontario acupuncturist such as Professor Cheung could be
considered a medical practitioner in 2003 and 2004. I do not see how it can be
otherwise since, in those years, acupuncturists in other provinces than Ontario were regulated provincially as
health professionals and were accepted by CRA as medical practitioners
described in subsection 118.4(2). This is confirmed by acupuncturists being
listed in CRA’s Interpretation Bulletin IT-519 in the years in question. The
first step in the analysis, unlike the second, does not turn on provincial
niceties.
(2) Second step: Authorized to Practise
[28] The
Crown relies upon the Regulated Health Professions Act of Ontario and
points out that in the years in question, and prior to the passage of the Traditional
Chinese Medicine Act, 2006 (Ontario),
traditional Chinese medicine practitioners and acupuncturists were not
regulated under that Ontario Act. The Crown was, however, unable to direct me
to anything in that Act, nor could I find anything in that Act, which
prohibited the practice of traditional Chinese medicine or acupuncture in
Ontario in 2003 and 2004. Indeed, Professor Cheung’s Institute appears to have
been an entirely above board and legitimate business operating lawfully in Ontario in 2003 and 2004. With respect to that argument, I do not
see anything in the Ontario Regulated Health Professions Act which
suggests that Professor Cheung’s Institute was not authorized to practise
traditional Chinese medicine and acupuncture in 2003 and 2004.
[29] I note in
particular that the Explanatory Note to Ontario’s Traditional
Chinese Medicine Act, 2006 says “The Bill amends Ontario Regulation 107/96
(Controlled Acts) under the Regulated Health Professions Act, 1991 by
revoking the provisions allowing anyone to perform acupuncture” (emphasis
added). This is a reference to subsection 8(1) of Ontario Regulation 107/96
“Controlled Acts”.
[30] The Ontario Regulated Health Professions Act applies
to Ontario’s self-governing health
professions. Indeed, Schedule 1 of that Act is titled Self‑Governing
Health Professions and “health profession” is limited to those in Schedule 1.
There is no reason to conclude that all health professionals must be part of a
self-governing profession to be a medical practitioner for purposes of the Income
Tax Act. This Ontario Act regulates the self-governing bodies. It also
restricts the use of the term doctor but not medical practitioner or other
term. It restricts the holding out as a regulatory college or as a health
profession corporation.
[31] Subsection 27(1) of this Ontario Act provides that
only members of a health profession regulated by that Act can perform
controlled acts. Subsection 27(2) defines controlled acts to include
performing a procedure on tissue below the dermis. However, acupuncture was
specifically excluded by regulation from the definition of controlled acts
altogether in the years in question. The clear result of this was that, as
Ontario’s 2006 Explanatory Note said, until that time anyone was allowed to
perform acupuncture in Ontario. A
specific provincial law which allows a person to do something authorizes a
person to do it. There is no reason not to equate “authorized” with
“permitted”.
[32] I conclude that Ontario acupuncturists such as
Professor Cheung satisfied the subsection 118.4(2) meaning of the term “medical
practitioner” in 2003 and 2004.
B. Subsection 118.2(2): Medical Services
[33] Having decided that an acupuncturist is a medical
practitioner, it follows that acupuncture services are medical services.
Dictionary definitions of “acupuncture” describe it as a branch of medicine.
Even the Crown’s Reply describes it as a “traditional Chinese medical
treatment”. If it were otherwise, acupuncturist services could never qualify
for the METC even in provinces or taxation years in which there is no issue
about acupuncturists being medical practitioners.
[34] I will be allowing Ms. Couture’s appeal with
costs.
Signed at Ottawa, Canada, this 27th day of March 2008.
"Patrick Boyle"
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