Date: 20030122
Docket: 2001-4028(IT)I
BETWEEN:
SHARON L. KETCHEN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Little, J.
A. FACTS
[1] The Appellant is a registered
nurse who has been compelled to retire because of ill health.
[2] As a result of a number of
personal problems including a traffic accident and a negative
reaction from an injection for Hepatitis B the Appellant is
permanently disabled. Exhibit A-1 is a letter dated October 6,
1997 from Dr. Bruce Carruthers, M.D. In his letter Dr.
Carruthers stated as follows:
My diagnostic conclusion is that the patient has an overlap
syndrome-primarily fibromyalgia but also chronic fatigue
syndrome. ... She has not been able to do a rehab program because
of aggravated symptomatology. Thus the patient remains totally
disabled for work from her combination of fibromyalgia and
chronic fatigue syndrome.
[3] In an attempt to obtain relief
from her medical problems the Appellant attended a seminar at
Onsite Workshops Living Centre Program ("Onsite") in
Charlotte, Tennessee. The Appellant paid expenses of $1,795.00
(U.S.) ($2,667.00 (Cdn.)) to attend the workshop at Onsite. The
Appellant stated that she was referred to the workshop by Dr.
Douglas S. Coleman, M.D. for treatment of stress and relationship
issues.
[4] The Appellant paid $1,826.50 to
Paulette Tomasson. Paulette Tomasson is a nurse and a Registered
Clinical Counsellor who provides counselling therapy to patients
from her home.
[5] The Appellant purchased
homeopathic remedies and received homeopathic testing services
from Avie Medical Inc. ("Avie"). Avie is a company
whose shares are owned by Dr. Gary B. Ryder. Dr. Ryder is a
Medical Doctor, a Naturopath and a Pharmacist.
[6] In filing her income tax return
for the 1999 taxation year the Appellant claimed the following
expenses as medical expenses:
Onsite
Workshops (Living
Centered
Program)
$2,667.00
P.
Tomasson,
R.N.
1,826.50
Avie
Medical Inc. -
remedies
628.00
Avie
Medical Inc. -
testing
235.00
$5,356.50
(unreconciled
difference)
(3.50)
Total
Medical
Expenses
$5,353.00
[7] On the 4th day of December 2000
the Minister of National Revenue (the "Minister")
reassessed the Appellant and disallowed the medical expenses of
$5,353.00 that were claimed by the Appellant.
B. ISSUE
[8] Is the Appellant allowed to deduct
the medical expenses of $5,353.00 in determining her income for
the 1999 taxation year?
C. ANALYSIS
[9] The phrase "medical
expenses" is defined in subsection 118.2(2) of the Income
Tax Act (the "Act") as follows:
(2) Medical expenses
-For the purposes of subsection (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 a dependent of the individual (within the meaning
assigned by subsection 118(6)) in the taxation year in which
the expense was incurred.
[10] I will now deal with the specific
amounts claimed by the Appellant:
1. Onsite Workshops
(Living Centered Program) - $2,667.00
Fifteen per cent of the amount of $2,667.00 paid by the
Appellant to Onsite was paid for lodging and meals and 85% of
$2,667.00 was paid for a group therapy workshop. These amounts
were not paid to a medical practitioner or a public hospital or
licensed private hospital. During the hearing the Appellant
testified that Onsite was not being administered by a medical
practitioner. However she said that before she went to Onsite she
was told that Onsite was administered by a medical practitioner.
Since there was no medical practitioner associated with Onsite,
the amounts paid to Onsite are not medical expenses and are not
deductible.
2. P. Tomasson -
$1,826.50
The
amount of $1,826.50 paid by the Appellant to P. Tomasson, R.N.
was paid for counselling and group therapy. This amount does not
qualify as a medical expense.
3. Avie Medical Inc. -
remedies - $628.00
Avie
Medical Inc. - testing - $235.00
The
Appellant testified that on the advice of
Dr. Gary Ryder she purchased herbs and other remedies
from Avie at a price of $628.00. Dr. Ryder is a Medical Doctor, a
Naturopath and a Pharmacist. The Appellant also paid $235.00 to
Avie for tests administered by Avie.
In
order to determine if this expense is deductible it is necessary
to consider the meaning of subsection 118.2(2)(n) of the
Act:
118.2(2) For the purposes of subsection (1), a medical
expense of an individual is an amount paid
...
(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;
[11] It will be noted that there are a
number of criteria that must be met to come within the words of
paragraph 118.2(2)(n). First, are the herbs and
substances purchased by the Appellant "drugs, medicaments or
other preparation or substances". It is important to note
that the test is not limited to drugs, but is considerably more
expansive. For example, the paragraph is not limited to
"prescribed drugs" since the opening words of the
paragraph contemplate a much broader range of substances. I find
that the herbs and other substances would come within the words
"other preparations or substances".
[12] The second criteria to note is that the
substance be manufactured, sold or represented for use in a
diagnosis, treatment or prevention of a disease, disorder,
abnormal physical state or the symptoms thereof or in restoring,
correcting or modifying an organic function. The Respondent
argued that the evidence did not support a finding that the herbs
and other substances met this requirement. I do not agree. The
reasons that these substances are on the market are to prevent
disease, treat symptoms of disease or to modify an organic
function. In my view the herbs and other substances belong in the
category of therapeutic products.
[13] The third criteria to consider is that
the herbs and other remedies were purchased for use by the
Appellant. This criteria is satisfied.
[14] The fourth criteria is that the herbs
and other remedies were prescribed by a medical practitioner, Dr.
Ryder. This criteria is satisfied.
[15] The fifth criteria is the requirement
that the substances prescribed be "recorded by a
pharmacist". The Appellant testified that Dr. Ryder is a
pharmacist.
[16] I find that the amount of $628.00
qualifies as a medical expense and the Appellant may deduct this
amount.
[17] I find that the amount of $235.00 is
not deductible.
[18] Before concluding my comments I wish to
refer to comments made by Associate Chief Judge Bowman in
Lundrigan v. Canada, [2002] 2 C.T.C. 2928. Associate Chief
Judge Bowman said at pages 2929-2930:
Mr. Lundrigan finds himself in almost the exactly the same
position as another taxpayer who came before me, Mrs. Banman in
the case of Banman v. R., [2001] 2 C.T.C. 2111, in which I
said - I will simply read paragraphs 4, 5 and 6 - "I have
great sympathy for the Appellant. I think she has very
intelligently gone to an alternative method of treatment and has
successfully treated medical conditions for her husband, herself
and her daughter. Nonetheless, the herbal preparations, the
vitamins and other things that she takes and that she purchases
from Natural Lifestyle are not prescribed by a medical
practitioner or dentist and are not recorded by a pharmacist.
This is a key condition and unfortunately, it is not met. I have
to take the law as I find it. I would like to be able to help
them, but I merely interpret the law". And skipping a couple
of references to cases, I go on to say, "I might just add
one further point, I am aware from what the Appellant tells me
and I'm aware generally that alternative medicines and
homeopathic treatment are making great progress these days. I can
well understand why in Paragraph (n) the government requires that
certain medications be prescribed by a medical practitioner
because there is, as yet, not very much control on the labelling
or the sale of alternative medicines and that needs to be done.
Sooner or later however, I think the government is going to have
to face that fact that homeopathic medicines, alternative forms
of treatment, herbs, natural healing, that sort of thing, are so
prevalent, it should consider an amendment to the Income Tax
Act and permit a tax credit in respect of these things. The
Appellant is a very good example of a person who has used
alternative methods successfully. I'm sorry that I cannot
give her any relief, but I do commend her for her courage in
coming to court".
In my view, Mr. Lundrigan, is in precisely the same position as
the taxpayer in that case. I would like to be able to give him
some relief, but unfortunately the law does not permit me to do
so. If Doctor Raman, a medical practitioner, were to prescribe
what he is taking as mentioned in his letter and if he were to be
able to buy it in a pharmacy or a drugstore, I should think that
that would meet the conditions of the statute, but I do not think
it does so yet.
[19] I also refer with approval to the
comments of my colleague Judge Miller in Bissonnette v.
Canada, [2002] T.C.J. No. 94 where he referred to medical
expenses and said at paragraph 12:
At this stage in the evolution of Canada's medical
practice, alternative treatments are just starting to gain some
recognition as justified, well-researched medical treatments. I
believe case law over the next few years will expand our
understanding of what can legitimately be considered medical
services.
[20] The Appellant testified that the group
therapy treatment received from Onsite was helpful to her
condition. The Appellant also testified that the counselling and
group therapy treatment from P. Tomasson was helpful. I join
Associate Chief Judge Bowman in saying that the Minister of
Finance should consider an amendment to the Income Tax Act
to allow alternative medicine, natural healing and homeopathic
treatment as medical expenses.
[21] The appeal is allowed to permit the
Appellant to deduct the amount of $628.00 as a medical
expense.
Signed at Vancouver, British Columbia, this 22nd day of
January 2003.
J.T.C.C.
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