Date: 20010627
Docket: 2000-4629-IT-I
BETWEEN:
DONALD BARTSCH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Rip, J.
[1]
Mr. Donald Bartsch appeals from an assessment of tax for 1998
which denied him a non refundable tax credit resulting from
purported medical expenses incurred for the benefit of his son,
Davin. The appellant claims that Davin received "care and
training", within the meaning of paragraph
118.2(2)(e) of the Income Tax Act
("Act"), from the Child Welfare Department of
Alberta while confined to a provincial institution in 1989 due to
his mental disability. Payments the appellant made to the Alberta
Government as a result of his son's confinement at the
institution are medical expenses, according to the appellant.
[2]
Davin Bartsch was 15 years of age in 1998. He was diagnosed by
Dr. S. Matthews to suffer from a severe oppositional
defiant disorder, a chronic organic neurophysiological disorder.
Davin was subject to rages, aggression and destruction and
anti-social behavior, among other problems. He could not be
contained safely at home; he was a threat to the safety and
well-being of his younger sister. Dr. Matthews wrote on a
Medical Information Form on June 12, 1998 that Davin
"requires a very strict structured consistent setting with
outlets for physical activity."
[3]
Prior to September 23, 1998, Davin was residing in a Catholic
Social Services Group Home. Catholic Social Services could not
handle him. At the behest of Ms. Mary Baird, a social
worker with the Alberta Government looking after Davin and acting
with the authority of the Child Welfare Director of Alberta,
Davin was apprehended on that day pursuant to section 17 of the
Child Welfare Act of Alberta[1] and taken to the Yellowhead Youth
Centre ("Centre") in Edmonton, a provincially funded
secure treatment institution. Davin's behavior, according
to Ms. Baird, was out of control posing a risk to himself and
others.
[4]
Davin was admitted to a secure treatment unit at the Centre by
the Alberta Family and Social Services Department. Placement in a
secure treatment was to allow for short term crises management
and assessment in a highly structured, safe environment. A secure
unit is a locked building designed to meet the needs of children
experiencing significant emotional, behavioral or psychiatric
distress. According to material distributed to parents by the
Centre, the units are staffed by trained child care counsellors
24 hours a day.
[5]
Soon after a child is admitted to a secure treatment centre, the
child appears in Family Court at which time the social worker
explains to the judge why confinement was necessary and, if
necessary, why further confinement is required. This was done by
Ms. Baird.
[6]
Pursuant to application made by Ms. Baird,
Judge R.S. Fowler of the Provincial Court of Alberta,
on October 2, 1998, issued the following orders:
that Davin be confined in a secure treatment institution for a
period of 22 days terminating on October 23, 1998 ("Secure
Treatment Order");
that the Child Welfare Director be the guardian of Davin for a
period of six months ("Temporary Guardianship
Order"), and
Mr. Bartsch pay for the maintenance of Davin to the Director
of Maintenance Enforcement of Alberta, the monthly sum of $400
commencing on November 1, 1998.
The reasons for the orders (i) and (ii) were that:
Davin suffered from a mental or behavioral disorder,
Davin was in a condition presenting a danger to himself or
others,
it was necessary to confine Davin in order to remedy or
alleviate the disorder, and
with respect to the Temporary Guardianship Order,
David was in need of protective services; and
Davin's survival, security or development may not be
adequately protected if he remains with his guardian, that is his
parents.
[7]
On October 21, 1998, Ms. Baird applied to renew the Secure
Treatment Order since "the child psychiatrist and
psychologist are recommending a further period of confinement to
stabilize behavior."
[8]
After October 22, 1998 Davin continued to be confined to the
Centre, but not in a locked unit. A child may stay in such a
facility for three years. During the time Davin was at the Centre
in 1998 his education continued by means of an individualized
program plan by Edmonton Public Schools and the Centre's
school. He also underwent a psychological assessment on October
1, 1997 and eight psychiatric consultations during the period
September 28, 1998 to November 16, 1998.
[9]
While at Catholic Social Services, Davin periodically visited the
family home. Home visits stopped once he was apprehended.
However, his parents visited him at least weekly at the Centre,
gave him money for clothing and entertainment and also bought him
gifts for his birthday, Christmas and special occasions. The
appellant also paid for his medical prescriptions.
[10] Ms. Baird
explained that the purpose of a guardianship order is to place
the child under the control and custody of the Director of Child
Welfare so that the child may be provided with the necessities of
life. The guardianship order is not meant to affect the
relationship between the child and the parents, which is
considered important, she added. The parents continue to be the
child's guardian but the Director has the final say, she
explained. Parents may provide the child with extra money,
clothing and support but the Director wants to be aware of this
extra support.
[11] The
Centre, Ms. Baird explained, is funded by the Ministry of Family
and Social Services. Children with emotional behavior problems
who are at risk to themselves or others are placed in the Centre.
Employees of the Centre are trained to work with these children.
Psychiatrists and psychologists also assess the children at the
Centre.
[12] The cost
of maintaining a child at the Centre, according to
Ms. Baird, is $200 a day. The Department asks parents to
assist financially. All money received from the parents go to the
provincial government to "offset the costs" at the
Centre. The money is commingled with the province's general
funds.
[13]
Respondent's counsel made four arguments in support of the
assessment:
The payments in issue are more properly described as
maintenance or support payments rather than "an amount paid
for the care, or the care and training" of Davin within the
meaning of paragraph 118.2(2)(e) of the Act;
Davin is not a dependant of the appellant within the meaning
of the Child Welfare Act of Alberta and the
Act;
The facts at bar do not fit into paragraph 118.2(2)(e);
and
No proper certificate within the meaning of paragraph
118.2(2)(e) has been made by an appropriately qualified
person that Davin, by reason of his mental handicap, requires the
facilities or personnel provided by the Centre.
[14]
Subsection 118.2(1) of the Act provides for a medical
expense tax credit based on a formula that includes the total of
an individual's medical expenses within any period of 12
months ending in the year. Medical expenses are described in
subsection 118.2(2) of the Act. Included among medical
expenses in paragraph 118.2(2)(e) is an amount
paid
for the care, or the care and training, at a school,
institution or other place of the patient, who has been certified
by an appropriately qualified person to be a person who, by
reason of a physical or mental handicap, requires the equipment,
facilities or personnel specially provided by that school,
institution or other place for the care, or the care and
training, of individuals suffering from the handicap suffered by
the patient;
[15] In the
facts at bar there is no doubt that the appellant paid an amount.
There is also no issue before me that the Centre is "a
school, institution or other place." There is also no issue
that Davin suffered from a mental disability in 1998. These
allegations were not seriously challenged by the respondent. The
question before me, however, is whether the amount paid was a
medical expense, more specifically, an amount paid for the care,
or the care and training of Davin at the Centre.
[16] In
Rannelli v. M.N.R.,[2] my late colleague Judge Sobier considered the meaning
of the term "care" in former subparagraph
110(1)(c)(vi) [replaced by current paragraph
118.2(2)(e)]. Sobier J. adopted an "object and
spirit" approach in interpreting the word
"care", and concluded that it denoted "not
custodial but of a nurturing or solicitous nature."[3] In Rannelli,
even though the children did not reside at the private school in
question, the school was found to have provided
"care" to the children within the meaning of former
subparagraph 110(1)(c)(vi).
[17] In
Anka v. Canada,[4] Judge Bonner considered paragraph 118.2(2)(e)
and clarified that "the words ‘care or care and
training' are used in the context of a definition of a
medical expense and that they take colour from that
context."[5]
In the appeal at bar, pursuant to a court order, Davin was not
only cared for at the Centre for the months that the maintenance
payments relate to, he actually resided there. However, were the
payments in question made for "care" that Davin
"received as a patient" for his mental handicap?
[18] Davin was
at the Centre in order to receive care and training "as a
patient". Davin was ordered by the Provincial Court to be
confined in a secure treatment institution in order to receive
treatment to remedy or alleviate his mental disorder. The
Provincial Court was satisfied that Davin's case met the
conditions required for granting a Secure Treatment Order under
subsection 42(3) of the Child Welfare Act. More
specifically, the Court found that Davin: (a) is suffering from a
mental or behavioral disorder; (b) presents a danger to himself
or others; (c) and it is necessary to confine Davin in order to
remedy or alleviate the disorder. Since Davin was ordered to a
secure treatment institution so that he could receive treatment
to remedy or alleviate his disorder, it follows that he was there
"as a patient".
[19] The
respondent's counsel argued that the payments the appellant
was required to make were maintenance or child support payments
and not payments "for the care, or the care and
training" of Davin. Counsel cited
subparagraph 29(4)(a)(iii), sections 39 and 93 of the
Child Welfare Act.[6] Subparagraph 29(4)(a)(iii) and section 39 refer
to a person making payments for the maintenance of the child;
section 93 refers to payment for the "care and
maintenance" of the child. Maintenance payments are not
medical expenses. Also, counsel argued, since the money paid by
the appellant went into the general funds of the province and not
directly to the Centre, the funds could not be said to have been
paid to the Centre for Davin's care.
[20] The fact
that the payments in question are for maintenance does not
preclude them from being medical expenses. Under subsection 2(2)
of the Maintenance Order Act of Alberta,[7] "maintenance"
includes "medical aid". Moreover, in R. v.
Brooks,[8]Walkem J. articulated that, for purposes of section 215
of the Criminal Code, the term "necessaries of
life" includes medical aid. Lastly, in Barker v.
The Queen,[9] Garon, J., as he then was, considered the term
"maintenance" for purposes of subsections 56.1(2) and
60.1(2) of the Act, and reaffirmed that
"maintenance" includes medical treatment. He stated
at paragraph 22:
Maintenance is defined in The Dictionary of Canadian Law, by
Daphne A. Dukelow and Betsy Nuse, in part as follows:
"Pecuniary support including support or alimony to be paid
to someone who is not a spouse. [...] Includes shelter, clothing,
nursing support, medical treatment, necessary training,
instruction and transportation."
[21] The
question remains whether the payments were made for the care and
training that Davin received at the Centre. Although the payments
were paid to the Director of Maintenance Enforcement, they
related to Davin receiving treatment for his mental disorder at
the Centre. Subsection 42(1) of the Child Welfare Act
specifies that the Director of Child Welfare may only apply for a
secure treatment order if the child is subject to a temporary or
permanent guardianship order. The temporary guardianship
application made by the Director and granted by the Provincial
Court was required in order for Davin to receive treatment for
his mental disorder at a secure treatment institution. Section 79
of the Child Welfare Act provides that an order of the
Court under the Child Welfare Act directing a person to
make a financial contribution towards the maintenance of a child
may be enforced under the Maintenance Enforcement Act.[10] The
Maintenance Enforcement Act provides the Director of
Maintenance Enforcement with enhanced creditor rights and
enforcement powers in respect of maintenance orders. Therefore,
with respect to maintenance orders issued pursuant to the
Child Welfare Act, the Director of Maintenance acts as a
collection and enforcement agent as mandated by the Child
Welfare Act and the Maintenance Enforcement Act.
Accordingly, in this case, the appellant made the maintenance
payments to the Director of Maintenance who was acting as a
collection and enforcement agent. The maintenance payments,
nevertheless, related to Davin requiring treatment for his mental
disorder at the secure treatment institution that he was ordered
to under the Child Welfare Act.
[22] Davin is
the appellant's child. Thus, within the meaning of the word
"dependant" in subsection 118(6) of the Act,
Davin would be a dependant of the appellant if at any time in
1998 he was dependant on his father for support. The
respondent's position, however, is that Davin was dependant
on the Child Welfare Director, his guardian, the person who had
control and custody of him when the payments in issue were
made.
[23] In The
Queen v. Robichaud,[11] Marceau J. interpreted the word "support"
for purposes of former subsection 109(1) [replaced by subsection
118(1)]. He stated at page 5267:
In my view, the English word "support" and
the French corresponding phrase "subvenir aux
besoins" necessarily convey the meaning of being a source
of subsistence, sustenance or living. He who is supported by
another, be it totally or only partially, is a dependant of the
other, i.e. derives his or some of his means of subsistence from
the other.
[24] If Davin
derived any means of subsistence from the appellant, then he
would have been dependant on the appellant for support wholly or
partially. The appellant made maintenance payments so that Davin
would be cared and provided for at the Centre. As a result of the
maintenance payments made by the appellant, it is fair to say
that Davin derived his or some of his means of subsistence from
the appellant. Thus, Davin was dependant on the appellant for
support.
[25] In
Keyes v. M.N.R.,[12] however, my colleague Judge Bonner considered a case
where a taxpayer claimed deductions under former paragraph
109(1)(d) [replaced by paragraph 118(1)(b)]
for dependant children. In that case, Bonner J. concluded
that the existence of a parent child relationship, and the fact
that the taxpayer provided food and shelter to his children
during access, were not enough to construe the children as being
dependant on the taxpayer for purposes of former paragraph
109(6)(a).
[26] Unlike
the case in Keyes, the appellant is providing more to
Davin than merely food and shelter during access times. The
appellant is subsidising, albeit in a modest way, Davin to be
cared and provided for at the Centre. During the year he also
paid for Davin to receive care at other institutions, and
provided support and a home to Davin when Davin was not attending
any school or other institution. The evidence more than suggests
that Davin's continued and constant source of support,
financial and moral, has been the appellant and his wife, and
that Davin has relied on this support. This is a clear indication
that a relationship of dependency exists between Davin and the
appellant. I also note that Keyes (as well as
Robichaud) deal with former
paragraph 109(1)(d) of the Act [current
paragraph 118(1)(b)] which requires that a related
individual is "wholly dependant" for support of a
taxpayer, whereas for purposes of this appeal, subsection 118(6)
only requires that a related individual be
"dependant" for support of a taxpayer, which is a
lower threshold.
[27] Davin was
dependant for support on the appellant in 1998. He was also a
"patient" at the Centre, an institution or other
place, for purposes of subsection 118.2(2).
[28] The next
issue is whether, in accordance with paragraph 118.2(2)(e)
of the Act, Davin has been certified by an appropriately
qualified person to be a person who, by reason of his mental
handicap, requires the facilities or personnel specially provided
by the Centre for the care and training of individuals suffering
from the handicap suffered by Davin.
[29] Counsel
for the respondent argued that no certificate exists that
complies with the requirements of paragraph 118.2(2)(e).
However, the totality of the evidence indicates that three
appropriately qualified persons have certified that Davin suffers
from a mental handicap, and requires treatment at a secure
treatment institution.
[30] In
Title Estate v. The Queen,[13] Sharlow J. considered what must be
specified in a certificate for purposes of paragraph
118.2(2)(e). She stated at paragraphs 2 and 5:
[2] Paragraph 118.2(2)(e) requires a certificate that
the patient is "a person who, by reason of a physical or
mental handicap, requires the equipment, facilities or personnel
specially provided" (by the place to which the expense is
paid) for the care or training of individuals suffering from that
handicap.
. . .
[5] In our view, a certificate under paragraph
118.2(2)(e) must at least specify the mental or physical
handicap from which the patient suffers, and the equipment,
facilities or personnel that the patient requires in order to
obtain the care or training needed to deal with that
handicap.
[31]Dr. Matthews, Judge Fowler and Ms. Baird were
"appropriately qualified persons" for purposes of
paragraph 118.2(2)(e). Under the laws of Alberta,
Dr. Matthews, Judge Fowler, and Ms. Baird were authorized in
1998 to certify that Davin suffered from a mental handicap and
required treatment at a secure treatment institution. I assume
that in 1998 Dr. Matthews was a registered medical
practitioner under the provisions of the Medical Profession
Act[14] and
therefore was authorized to certify that Davin suffered from
oppositional defiant disorder and that he "requires a very
strict, structured, consistent setting". As a Provincial
Court Judge in 1998, Judge Fowler was authorized by virtue of
section 21.2 of the Provincial Court Act[15] to order that Davin be
required to be confined at a secure treatment institution so that
he may receive treatment to remedy or alleviate his mental
disorder. Ms. Baird was a Child Welfare Worker in 1998, employed
in connection with the administration of the Child Welfare
Act pursuant to subsection 94(3) of the same act. Ms. Baird
was authorized to attest on the prescribed form[16] required to make an
application for a secure treatment order, that Davin suffered
from a mental disorder and that it was necessary to confine Davin
in a secure treatment institution in order to remedy or alleviate
the disorder. Accordingly, Dr. Matthews, Judge Fowler and Ms.
Baird were "appropriately qualified persons" for
purposes of paragraph 118.2(2)(e).
[32] In the
case at bar, Dr. Matthews, certified on a medical form, dated
January 12, 1998, that Davin suffered from severe oppositional
defiant disorder and recommended that Davin requires a very
strict, structured, consistent setting. Dr. Matthews specified
the mental handicap from which Davin suffered. Hence, the first
requirement articulated by Sharlow J. in Title Estate
regarding certification for purposes of paragraph
118.2(2)(e), has been met.
[33] In the
medical form, Dr. Matthews stated that Davin requires a very
strict consistent setting. As well, Ms. Baird, in her Notice of
Application for Secure Treatment Order, dated September 25, 1998,
attested that Davin suffered from a mental or behavioral
disorder, that there was a risk of harming himself or others, and
that it was necessary to confine Davin in a secure treatment
institution in order to remedy or alleviate the disorder.
Paragraph 1(1)(u) of the Child Welfare Act
states that a "secure treatment institution" means an
institution prescribed by the Minister of National Revenue
("Minister") as a secure treatment institution.
Schedule 2 of the Child Welfare Act General
Regulation[17] lists eight secure treatment institutions in Alberta,
one of which is in Edmonton: Yellowhead Youth Centre, where Davin
was admitted. Paragraph 43(2)(a) of the Child Welfare
Act states that the person in charge of the secure treatment
institution shall be responsible for ensuring that the child
ordered to the institution is provided with the diagnostic and
treatment services that the child is in need of "in
accordance with the standards prescribed in the
regulations". Thus, the equipment, facilities or personnel
at a structured treatment institution are regulated under the
laws of Alberta. As a result, when Ms. Baird, under the authority
granted to her by the Child Welfare Act, applied for an
order for Davin to receive secure treatment at a secure treatment
institution, her reference to such an institution was
sufficiently specific as to the "equipment, facilities or
personnel specially provided by that..., institution for the
care and training of individuals suffering from the handicap
suffered by the patient". Thus, the second requirement
articulated by Sharlow J. in Title Estate regarding
certifications for purposes of paragraph 118.2(2)(e), has
been met.
[34] In sum,
the evidence as a whole indicates that Dr. Matthews, Ms. Baird
and Judge Fowler are all "appropriately qualified
persons" that have certified that Davin requires, by reason
of his mental handicap, the equipment, facilities or personnel
specially provided by a secure treatment institution, for the
care and training of Davin for the handicap he suffers.
[35] Finally,
I refer to the reasoning of Bowman J., as he then was, in
Radage v. The Queen:[18]
(a) The legislative intent appears to be to provide a modest
amount of tax 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 everyone 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.
(b) The court must, while recognizing the narrowness of the
tests enumerated in sections 118.3 and 118.4, construe the
provisions liberally, humanely and compassionately and not
narrowly and technically. In Craven v. The Queen,
94-2619(IT)I, I stated:
The application of the inflexible tests in section
118.4 leaves the court no room to apply either common sense or
compassion in the interpretation of the disability tax credit
provisions of the Income Tax Act - provisions that
require a compassionate and commonsense application.
In my view I stated the test unduly narrowly in that case. I
have heard many disability tax credit cases since that time and
my thinking has evolved. [...] If the object of Parliament, which
is to give to disabled persons a measure of relief that will to
some degree alleviate the increased difficulties under which
their impairment forces them to live, is to be achieved the
provision must be given a humane and compassionate construction.
Section 12 of the Interpretation Act reads as follows:
Every enactment is deemed remedial, and shall be given
such fair, large and liberal construction and interpretation as
best ensures the attainment of its objects.
(c) If there is doubt on which side of the line a claimant
falls, that doubt should be resolved in favour of the
claimant.
[36] I agree
with my colleague McArthur J. in Bryce v. The Queen[19] that
notwithstanding Bowman J. was referring to the deductibility of
disability tax credits in section 118.3, his reasons apply
equally to the case at bar.
[37] A
liberal, humane and compassionate interpretation of paragraph
118.2(2)(e) requires that doubt should be resolved in
favour of the appellant.
[38] The
appeal is allowed, with costs, if any. The matter will be
referred back to the Minister for reconsideration and
reassessment on the basis that the $400.00 he paid to the
Director of Maintenance Enforcement of Alberta is a medical
expense.
Signed at Ottawa, Canada, this 27th day of June
2001.
"Gerald J. Rip"
J.T.C.C.
COURT FILE
NO.:
2000-4629(IT)I
STYLE OF
CAUSE:
Donald Bartsch and Her Majesty The Queen
PLACE OF
HEARING:
Edmonton, Alberta
DATE OF
HEARING:
May 10, 2001
REASONS FOR JUDGMENT BY: The
Honourable Judge G. Rip
DATE OF
JUDGMENT:
June 27, 2001
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Scott McDougall
COUNSEL OF RECORD:
For the
Appellant:
Name:
For the
Respondent:
Scott McDougall
Counsel
Department of Justice (Edmonton)
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-4629(IT)I
BETWEEN:
DONALD BARTSCH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on May 10, 2001 at Edmonton,
Alberta, by
the Honourable Judge Gerald J. Rip
Appearances
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Scott McDougall
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 1998 taxation year is allowed, with costs, if any, and
the matter is referred back to the Minister of National Revenue
for reconsideration and reassessment on the basis that the sum of
$400.00 paid by the appellant in each of November and December
1998 to the Director of Maintenance Enforcement of Alberta
pursuant to the order of the Provincial Court of Alberta, dated
October 2, 1998, is a medical expense.
Signed at Ottawa, Canada, this 27th day of June
2001.
J.T.C.C.
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