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Citation: 2004TCC344
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Date: 20040506
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Docket: 2003-4149(IT)I
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BETWEEN:
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ARTHUR HERZIG,
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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 appellant's 2001 taxation year.
[2] The appellant seeks to deduct
$32,762.02 as a medical expense credit. This amount was spent by
him on homeopathic medicine and nutrients and herbal supplements
prescribed by medical doctors, Dr. Paul Jaconello and
Dr. George Zabrecky, in the treatment of
Mr. Herzig's wife, Tali, who had metastatic breast cancer.
Mrs. Herzig died from this condition in 1993.
[3] The total claim under
paragraph 118.2(2)(n) of the Income Tax Act
for 2001 was $46,266.00. The amount of $16,749.41 was allowed by
the Canada Customs and Revenue Agency and $30,963.77 was
disallowed. The appellant increased his claim to $32,762.02 at
trial to take into account the fact that some products had been
purchased in the United States in U.S. dollars.
[4] The issue is whether the cost of
the nutrients and vitamins and herbal supplements may be included
in computing a medical expense credit under
subsection 118.2(1).
[5] Subsection 118.2(1) permits the
deduction in computing tax of an amount computed in accordance
with a formula in which one component is the individual's medical
expenses. Medical expenses are defined to cover a number of items
including (paragraph 118.2(2)(n)).
(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;
[6] The appellant also relies upon
paragraph 118.2(2)(l.9), which reads:
(l.9) as remuneration for therapy provided to
the patient because of the patient's severe and prolonged
impairment, if
(i) because of the patient's impairment, an amount may
be deducted under section 118.3 in computing a taxpayer's tax
payable under this Part for the taxation year in which the
remuneration is paid,
(ii) the therapy is prescribed by, and
administered under the general supervision of,
(A) a medical doctor or a psychologist, in the case of mental
impairment, and
(B) a medical doctor or an occupational therapist, in the case
of a physical impairment,
(iii) at the time the remuneration is paid, the
payee is neither the individual's spouse nor an individual who is
under 18 years of age, and
(iv) each receipt filed with the Minister to prove
payment of the remuneration was issued by the payee and contains,
where the payee is an individual, that individual's Social
Insurance Number;
[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.
[11] The appellant also argues that the
limitation of the type of medications to prescription drugs is
discriminatory and is contrary to section 15 of the Canadian
Charter of Rights and Freedoms. Notice of this argument was
not given to the provincial attorneys general as required by
section 19.2 of the Tax Court of Canada Act. The practice
in this court is to hear the constitutional argument and if it
has, on a preliminary consideration, some merit, to adjourn so
that the required notice can be given: Lewis v. Canada,
[2004] T.C.J. 145; Cavalier v. The Queen, [2002] 1 C.T.C.
2001; and Whalen v. The Queen, 2001 DTC 190.
[12] The matter was fully discussed by
Bowie J. in Cavalier. I am in respectful agreement
with his observation that the procedure followed by the Federal
Court of Appeal in Langlois v. R., [1999] 4 C.T.C. 258,
should be followed rather than the obiter dictum in
Nelson v. R., 2000 DTC 6556. Section 19.2 of the Tax
Court of Canada Act restricts only the sort of relief that
can be given when certain types of constitutional challenges to
legislation are raised. It certainly does not restrict the sort
of arguments a court can hear. It restricts only what effect the
court can give to such arguments.
[13] I regret that I am unable to agree with
the appellant's argument that the words "as recorded by a
pharmacist" constitute discrimination within the meaning of
subsection 15(1) of the Charter. I agree with the view of
Paris J. in Lewis, supra. Whether or not I agree with
the legislative policy behind the requirement that the prescribed
medication be recorded by a pharmacist, I do not think the
requirement results in discrimination against the appellant or
indeed anyone else on any of the grounds enumerated in
subsection 15(1).
[14] The appellant's third argument is that,
if the cost of homeopathic substances does not fall within
paragraph 118.2(2)(n), it falls within paragraph
118.2(2)(l.9) as "remuneration for therapy provided to the
patient...".
[15] I do not propose to quote the rest of
the paragraph because the cost of homeopathic medicaments and
herbal supplements does not, in my view, constitute "remuneration
for therapy...". In the context of a provision that is remarkable
for its specificity it would be strange if those words covered
the cost of non-prescription nutrients and vitamins and
minerals supplements, when a few paragraphs earlier a credit for
drugs prescribed by a physician is severely limited.
[16] An interpretation of those words that
is more consonant with the scheme of section 118.2 as a
whole is that it refers to amounts paid to a person for rendering
the service of providing therapy such as physiotherapy, massage
therapy or psychological counseling.
[17] While "remuneration" may, in a broad
sense, include payment for goods, the more usual use of the word
is to denote a payment for services.
[18] The definition in the Oxford Canadian
Dictionary of "remunerate" is:
1 reward; pay for services rendered. 2 serve as
or provide recompense for (toil etc.) or to (a person).
Therapy can, in the same way, be broad enough to cover
medicine, but if Parliament means drugs and medicaments it seems
capable of saying so, as in
paragraph 118.2(2)(n).
[19] Therapy as used in subsection 118.2(2)
means something else and if Parliament uses a different word it
presumably means something different - in this case physical or
psychological therapy.
[20] I must, regretfully, dismiss the
appeal.
Signed at Ottawa, Canada, this 6th day of May
2004.
Bowman, A.C.J.
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