[OFFICIAL ENGLISH TRANSLATION]
Date: 20010924
Docket: 2001-860(IT)I
BETWEEN:
PIERRE BOURGEOIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
(Delivered orally from the bench on July 31, 2001, at Montréal,
Quebec, and revised at Ottawa, Ontario, on September 24, 2001.)
Lamarre, J.T.C.C.
[1] The appellant is appealing from
assessments made by the Minister of National Revenue ("Minister") for
the 1997, 1998 and 1999 taxation years. By these assessments:
1. the Minister
added to the appellant's income an amount of $17,707.33 that the appellant
received from the Régie des rentes du Québec in 1999 as a disability benefit
but did not include in his income; that amount included a lump sum for 1997 and
1998; the Minister spread the taxation of the amount over the 1997, 1998 and
1999 taxation years using the method authorized by section 120.3 of the Income
Tax Act ("Act");
2. the Minister denied the credit for mental
or physical impairment claimed by the appellant for those three years.
[2] The appellant explained that
$8,538.39 of the $17,707.33 awarded to him as a disability benefit was withheld
by the Quebec government to repay the social assistance overpayments he had
received. The appellant is therefore asking that the taxable amount of the
disability benefit be reduced by the amount that was so repaid.
[3] The notices of assessment issued
for the 1997 and 1998 taxation years, which were filed in evidence as Exhibits
A‑1 and A‑2, show that the appellant first included but then
deducted the social assistance payments in computing his taxable income; as a
consequence, in accordance with paragraphs 56(1)(u) and 100(1)(f)
of the Act, he did not have to pay any tax on these payments.
[4] Under paragraph 56(1)(a)
of the Act, the amount of the disability benefit is fully taxable.
Although part of that amount was used to repay the social assistance
overpayments the appellant had received, that is not a reason for reducing the
taxable amount of the disability benefit. First of all, the way that income is
disposed of should not affect the taxation of income that is otherwise taxable
under the Act. Moreover, the appellant did not have to assume any tax
burden with respect to the social assistance payments.
[5] Furthermore, the recipient of a
disability benefit may elect to spread the amount of the benefit over the
previous taxation years to which it relates. This is what the Minister did in
these assessments, to the appellant's advantage.
[6] It is therefore my view that the
assessed amounts are valid as regards the disability benefit.
[7] As for the credit for mental or
physical impairment, it is my opinion that the evidence shows on a balance of
probabilities that the appellant has a severe and prolonged mental impairment
the effects of which are such that his ability to perform a basic activity of
daily living (namely perceiving, thinking and remembering) has been markedly
restricted within the meaning of sections 118.3 and 118.4 of the Act
since March 1995.
[8] In the medical certificate filed
as Exhibit I‑1, Dr. Louis Gaborit, a psychiatrist, referred to a
permanent marked restriction existing since March 1995 and attributable to a
major personality disorder with schizoid and antisocial traits that
considerably hinders normal functioning and the use of the cognitive functions.
Dr. Gaborit did not answer question 9 in Part B of the medical certificate
(namely, the question whether the impairment is severe enough to restrict the
basic activity of daily living in question all or substantially all of the
time, even if the patient takes medication or receives therapy). However, I
consider that the letter (filed as Exhibit A‑6) by Dr. Maurilio
Villota, a neurologist, revealing the existence of a slow dysfunction
originating in the subcortical regulating centres, and the letter (Exhibit A‑7)
by Dr. Gaborit revealing a schizotypal personality disorder that may jeopardize
the safety of the appellant and of others complete the medical certificate and
attest sufficiently to a mental impairment that entitles the appellant to a
credit under the Act.
[9] In Radage v. Canada,
[1996] T.C.J. No. 730 (Q.L.), mental impairment was analysed as follows by
Judge Bowman of this Court in paragraph 45 of the English version:
Finally there must be considered –
and this is the most difficult principle to formulate – the criteria to be
employed in forming the judgement whether the mental impairment is of such
severity that the person is entitled to the credit, i.e. that that person's
ability to perceive, think and remember is markedly restricted within the
meaning of the Act. It does not necessarily involve a state of complete
automatism or anoesis, but it should be of such a severity that it affects and
permeates his or her life to a degree that it renders that person incapable of
performing such mental tasks as will enable him or her to function
independently and with reasonable competence in everyday life.
[10] It is therefore my opinion that
the appellant has proved that he has a mental impairment of such a severity
that it affects and permeates his life to a degree that it renders him
incapable of performing such mental tasks as will enable him to function with
reasonable competence in everyday life.
[11] Moreover, in my view, the
requirement in the Act that a doctor certify that the appellant has a
severe and prolonged impairment—as discussed in MacIsaac v. Canada,
[1999] F.C.J. No. 1898—as a prerequisite to the appellant's obtaining a credit
for mental or physical impairment has been satisfied in the circumstances.
[12] For these reasons, I would grant
the credit for mental or physical impairment for the 1997, 1998 and 1999
taxation years, which are the years at issue here.
[13] The appeals from the assessments
made under the Act for the 1997, 1998 and 1999 taxation years are
therefore allowed and the assessments are referred back to the Minister for
reconsideration and reassessment on the basis that the appellant was entitled
to a credit for mental or physical impairment for each of those years in accordance
with section 118.3 of the Act. The assessments remain unchanged in all
other respects.
Signed at
Ottawa, Canada, this 24th day of September 2001.
J.T.C.C.
Translation
certified true
on
this 21st day of February 2003.
Erich
Klein, Revisor.
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