Citation: 2004TCC606
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Date: 20040916
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Docket: 2004-824(IT)I
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BETWEEN:
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CINDY WHITFIELD,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Bowman, A.C.J.
[1] This appeal is from an assessment
for the 2002 taxation year. The issue is whether the cost of an
elliptical trainer and a hot tub are allowable medical expenses
for the purposes of computing the appellant's
non-refundable medical expense credit under section 118.2
of the Income Tax Act. The amount spent on these two items
is not disputed.
[2] The appellant's husband, Daniel,
has suffered from clinical depression, bi-polar disorder,
obesity and chronic pain in his right hip for a number of years.
Since 1995 he has been receiving long-term disability
payments.
[3] In 2002 he had his right hip
replaced. He suffers from lower back pain and spinal problems. He
has been treated by a number of specialists, both with respect to
his hip and back problems and with respect to his psychiatric
problems. Whether his physical and his psychiatric problems are
connected is something that I need not decide. Indeed, I am not
in a position to do so. It is sufficient to say that the
appellant's husband has serious medical problems. A number of
medical reports were put in evidence.
[4] The elliptical trainer was
purchased because Daniel Whitfield's orthopedic surgeon
recommended "no impact" exercise. The elliptical trainer achieves
this purpose because its use does not involve having his feet
touch the ground, as would be the case with walking, jogging or a
treadmill. The elliptical trainer apparently bears some
resemblance to a stationary bicycle except that the front wheel
is elliptical and power is provided both by pedals and by the
moveable handlebars.
[5] Mr. Whitfield spends about
five hours per week on the trainer. The hot tub was purchased
because Mr. Whitfield's psychiatrist also recommended
hydrotherapy not only because it provides deep relaxation for
depression and anxiety, but also helps to relieve joint pain.
[6] The medical expense credit is
given under subsection 118.2(1) for a large number of
expenses related to medical matters. Subsection 118.2(2)
reads in part:
(2) - For the purposes of subsection (1), a medical expense of
an individual is an amount paid
. . . . .
(m) - for any device or equipment for use by the
patient that
(i) is of a prescribed kind,
(ii) is prescribed by a medical practitioner,
(iii) is not described in any other paragraph of this subsection,
and
(iv) meets such conditions as may be prescribed as to its use or
the reason for its acquisition,
to the extent that the amount so paid does not exceed the
amount, if any, prescribed in respect of the device or
equipment;
Section 5700 of the Income Tax Regulations reads in
part
5700. For the purposes of
paragraph 118.2(2)(m) of the Act, a device or
equipment is prescribed if it is a
. . . . .
(i)
device that is designed to assist an individual in walking where
the individual has a mobility impairment;
The French version of paragraph (i) reads
i)
tout dispositif qui est conçu à l'intention du
particulier à mobilité réduite pour l'aider
à marcher;
[7] In paragraph (m) of
subsection 118.2(2) the word "prescribed" is obviously used
in two senses - one in a legislative sense and one in a medical
sense. Subparagraphs (i) - (iv) of paragraph (m) in
French make the distinction clear, if it were not already
clear.
m) pour tout dispositif ou équipement
destiné à être utilisé par le
particulier, par son conjoint ou par une personne à charge
visée à l'alinéa a) et qui
répond aux conditions suivantes, dans la mesure où
le montant payé ne dépasse pas le montant
fixé par règlement, le cas échéant,
relativement au dispositif ou à
l'équipement :
(i)
il est d'un genre visé par règlement,
(ii)
il est utilisé sur ordonnance d'un médecin,
(iii)
il n'est pas visé à un autre alinéa du
présent paragraphe,
(iv)
il répond aux conditions prescrites quant à son
utilisation ou à la raison de son acquisition;
There are two problems here
(a) Were the elliptical trainer
and the hot tub "prescribed" by a doctor?
(b) Were they devices designed to
assist an individual in walking?
[8] Where a physician "prescribes"
something it need not be in writing. A doctor may write the name
of a prescription drug on a piece of paper before a pharmacist
will fill the prescription but that is certainly not true of a
medical practitioner's advice that a particular device or a
non-prescription drug be acquired and used by a patient. I should
not have thought that it was this Court's role to read into a
statute words that will limit the plain meaning of the statutory
language.
[9] Nonetheless, we have a decision of
the Federal Court of Appeal in The Queen v. Ray, 2004 DTC
6028, which appears to stand for the proposition that the words
of section 118.2 are to be given the narrowest possible
construction against the taxpayer. In Herzig v. The Queen,
2004 T.C.C. 344, I referred to the Ray decision as
follows:
[7] This is a most
deserving case. Mr. Herzig testified that the oncologist
gave his wife six months to live. With the use of the homeopathic
medicines and supplements his wife succeeded in prolonging her
life by about four years.
[8] We have,
unfortunately, the decision of the Federal Court of Appeal which
requires that a narrow interpretation be placed on
paragraph 118.2(2)(n). In The Queen v. Ray,
2004 DTC 6028, the Federal Court of Appeal stated at page
6031:
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.
I cannot accept the suggestion that, in the case
of a medication that is prescribed by a physician but is
purchased at a pharmacy off the shelf, a sales slip or invoice
from the pharmacist would be a sufficient "recording"
to meet the statutory requirement. A record in that form cannot
meet the apparent function of the recording requirement. There
must be a record kept by the pharmacist in his or her capacity as
pharmacist. That necessarily excludes substances, however useful
or beneficial, that are purchased off the shelf.
[9] In other words
only prescription medicines would qualify.
[10] I would do the appellant no
favour if I were to adopt a more compassionate approach, as has
been done in other cases in the court, to read "as recorded by a
pharmacist" as encompassing medications prescribed by a medical
doctor that are sold in pharmacies but recorded simply as a sale
by the pharmacist but not as a prescription drug. Such a decision
would simply be reversed by the Federal Court of Appeal.
[10] The approach enunciated in Ray
may usefully be contrasted with that stated in Friis v. The
Queen, 98 DTC 6419, and Johnston v. The Queen, 98 DTC
6169. In Friis, Linden J.A. speaking for the majority,
stated:
[1] In my view, this section 28 application should be
allowed in the light of this Court's decision in Johnston v.
Canada, [1998] F.C.J. No. 169 which was released following
the Tax Court Judge's decision in this case. In that case,
Justice Létourneau, quoting Judge Bowman in another
case (Radage v. R., [1996] 3 C.T.C. 2510), indicated
that these "provisions must be given a humane and compassionate
construction" and should not be interpreted "so restrictively as
to negate or comprise the legislative intent", which is to
"provide modest relief to persons who fall within a relatively
restricted category of markedly physically or mentally impaired
persons. The intent is neither to give the credit to every one
who suffers from a disability nor to erect a hurdle that is
impossible for virtually every disabled person to surmount. It
obviously recognizes that disabled persons need such tax relief
and it is intended to be of benefit to such persons."
Notwithstanding the Ray decision I do not think I would
be justified in reading into paragraph (m) the words "in
writing".
[11] I have however somewhat greater
difficulty in finding that the doctors prescribed the elliptical
trainer or the hot tub. What they prescribed was
"non-impact" exercise and hydrotherapy. The evidence does
not go so far as to establish that they ever mentioned the
specific device although one might reasonably infer that they
were prescribing any type of device that provided the type of
activity which the doctors considered beneficial. There are,
after all, not that many. So far as hydrotherapy is concerned,
where better to obtain it than in a hot tub? On the other hand,
an elliptical trainer is only one of many devices that might be
used for non-impact exercise.
[12] I think therefore that the hot tub was
prescribed by a medical practitioner within the meaning of
subparagraph 118.2(2)(m)(ii), but it would be
stretching a point to say the elliptical trainer was.
[13] On the question whether they are "of a
prescribed kind" within subparagraph (i) there is
considerably more doubt, and the decisions in this Court appear,
on their face at least, to be somewhat inconsistent. The
differences are illustrated in the judgment of Justice Bell in
Klywak v. The Queen, 2004 T.C.C. 523, where he said:
[6] The Appellant
stated that if she did not have the hot tub she would be loaded
with medication and could not function properly. She referred to
the letters from her doctor. She also referred to Johnson v.
Her Majesty the Queen, [2003] T.C.J. No. 41, in which
Little, J. of this Court allowed as a medical expense the cost of
a hot tub purchased on the recommendation of the Appellant's
doctor. The learned Judge said:
I accept the Appellant's credible and uncontradicted
evidence that she purchased the hot tub only for the purpose of
hydrotherapy and relief of pain.
[7] She also
referred to James Donaghue v. Canada, [2003] T.C.J. No.
721, in which O'Connor, J. considered the hot tub a
prescribed device since he believed that it qualified under
subparagraph (i) of Regulation 5700 as a device that is designed
to assist an individual in walking where the individual has a
mobility impairment. He stated further that it may qualify under
subparagraph 118.2(2)(m) of the Act since it is of
a prescribed kind and since it was purchased on the advice of a
medical practitioner. He stated that there was no indication that
the prescribing must be in writing and that the hot tub greatly
alleviated the Appellant's problem, thus enabling him to be
mobile both within and outside his home.
. . . . .
[10] Respondent's counsel
referred to Gibson v. Canada, [2000] T.C.J. No. 753,
affirmed by the Federal Court of Appeal, [2001] F.C.J. No. 1758.
In this court Mogan, J. described the Appellant as having
developed fibromyalgia in and around her neck, causing severe
pain in the muscles around the neck and in her right arm. After a
description of therapy he wrote that the Appellant found relief
from being in a tub with jets of hot water focused on her neck
and arms. She, therefore, had a whirlpool spa installed in her
home. She found that the hot tub reduced her pain and allowed her
more mobility. The judgment referred to Vantyghem v. The
Queen, [1999] 2 C.T.C. 2159 in which Rip, J. of this
Court determined that the "renovation" of a bathroom
may include the installation of items that were not found in the
bathroom when originally built, such renovations being the cost
of installing a hot tub. Judge Mogan also referred to Clark v.
The Queen, [1994] 4 C.T.C. 2005 in which Rowe, J. of
this Court dismissed the appeal of a wife who attempted to deduct
as a medical expense the cost of purchasing and installing a hot
tub which was prescribed by her husband's arthritis
specialist. He further referred to Ollman v. The Queen,
[2000] 1 C.T.C. 2789 in which a woman purchased a hot tub on the
recommendation of her orthopaedic surgeon and physiotherapist to
get relief from chronic lower back pain following a car accident
and serious injuries. O'Connor, J. held that the cost of the
hot tub did not qualify as a medical expense. He referred also to
Gordon v. The Queen, [2000] 2 C.T.C. 2399 in which
Gordon's wife was recovering from a car accident which left
her with severe rheumatologic disorders including fibromyalgia
and inflammatory osteo-arthritis. Because she required frequent
hot baths it was recommended that she have one installed in her
home. Beaubier, J. concluded that the hot tub was not a
device or equipment within the meaning of paragraph
118.2(2)(m) but he allowed the installation cost as a
reasonable expense relating to a renovation or alteration of the
Gordon family dwelling. Mogan, J. concluded that having
regard to paragraph 118.2(2)(m) of the Act and the
items listed in Regulation 5700 he was satisfied that the hot tub
did not qualify as a "device or equipment" and allowed
only the cost of installing same.
[14] In addition to the cases referred to by
Bell J., we have Hope v. Canada,
2003 T.C.C. 493, in which Little J. held that the
cost of a hot tub was not an allowable medical expense for the
purpose of section 118.2. In Hope, Little J. did
not refer to his decision in Johnson in which he allowed
the cost of a hot tub. Similarly, O'Connor J. in Donaghue v.
Canada, [2003] T.C.J. No. 721 (Q.L.), allowed the cost
of a hot tub as a medical expense. He did not refer to his
earlier decision in Ollman v. The Queen, [2000] 1 C.T.C.
2789, in which he held that the cost of a hot tub was not an
allowable medical expense.
[15] In Gibson v. Canada, [2000]
T.C.J. No. 753 (Q.L.), Mogan J. held that the cost of a
hot tub was not an allowable medical expense but the cost of
installing it was. His judgment was affirmed by the Federal Court
of Appeal. Rothstein J. stated that "The cost of the spa
itself did not qualify for any medical expense credit".
[16] The statement was of course
obiter. The question of the cost of the spa was not before
the Federal Court of Appeal. All that was before that court was
the cost of installation. Therefore, the observation by
Rothstein J. cannot be regarded as authority.
[17] One could say that the cases are
irreconcilable or one could say that they each turn on their own
facts - sometimes a hot tub is designed to assist an individual
in walking and sometimes it is not. If I can find a consistent
thread in all of these cases - and perhaps I am being overly
optimistic - it is this: if on the evidence the judge finds that
a significant purpose and use of the hot tub is to assist in the
mobility of the individual the courts seem inclined to allow the
expense. I would also observe that in the majority of the cases
this court has held that the cost of a hot tub does not qualify.
This is certainly the case in Klywak where Bell J.
made a specific finding of fact that the purpose and effect of
the hot tub assisted the appellant in walking.
[18] I do not think that the evidence in
this case supports the conclusion that either the hot tub or the
elliptical trainer were designed to assist the individual in
walking. They may have helped to alleviate the hip and back pain
and the hot tub certainly alleviates the depression.
[19] On the basis of the Gibson case
it seems clear that that cost of installing the hot tub is
allowable not under paragraph 118.2(2)(m) but under
paragraph (l.2).
[20] The appeal is allowed and the
assessment is referred back to the Minister of National Revenue
for reconsideration and reassessment to allow the cost of
installing the hot tub.
Signed at Ottawa, Canada, this 16th day of
September 2004.
Bowman, A.C.J.