Flumerfelt v. R., [1999] 3 CTC 2168 (Informal Procedure)

Bowie T.C.J.:

These appeals are brought from reassessments for income tax for the 1994 and 1995 taxation years. In each of those years the Appellant, when filing her income tax return, claimed to be entitled to a deduction for medical expenses under section 118.2 of the Income Tax Act (the Act), including an amount of $30,000 for attendant care. This $30,000 is the amount paid by her in each of the years under appeal to the Renoir, which is an apartment building designed to cater to senior citizens. The Minister of National Revenue, in reassessing her, has taken the position that the Appellant is not entitled to deduct these amounts of $30,000 as medical expenses. Her claim to that deduction is the only subject matter of the appeals. The claim is based upon paragraph 118.2(2)(b), or alternatively paragraph 118.2(2)(b.1) of the Act.

It is not disputed that the Appellant, who is now 81 years of age, had, at the relevant time, a severe and prolonged physical impairment. She cannot walk by herself, and is dependent upon a motorized chair and a walker to get about. She has qualified for the disability tax credit for many years. Nor is it disputed that the Renoir, where she lives, is not a nursing home. It is an apartment building designed and built principally to house senior citizens who require, or simply wish to have, some assistance in their daily living. Its residents average about 85 years of age. Many, like the Appellant, have infirmities, either physical or mental, which make it impractical for them to live independently in a more conventional building. Some simply prefer the comfort and the convenience of having available to them the wide range of services and amenities which the Renoir offers. The residents live in apartments, which may have one or two bedrooms, or may be studio units. The Appellant has a two bedroom apartment. It includes a small kitchen with a bar refrigerator and a toaster, and a bathroom which is fitted with grab bars. She also has a hydraulic seat in the bathtub to enable her to use it unassisted.

In addition to the physical apartment space rented by the residents, the Renoir provides what it describes as its “attendant care service package”. This package includes meal preparation and service to the residents in a central dining room. Meals may also be delivered to residents’ apartments on trays, if that is required. There is weekly housekeeping, which includes linen and towel service, as well as cleaning of the apartment. Staff do minor maintenance and repairs for the residents. There is a recreational therapist on staff, and supervised recreational activities are organized for the residents. Transportation is provided to take them to medical appointments and for social outings and shopping. There are both registered nurses and licensed practical nurses on staff; the latter are available 24 hours per day.

Ms. Nancy Dotzert, General Manager of the Renoir, gave evidence. From her evidence it is clear that the “attendant care package” is not an optional extra which residents may purchase, or decline, according to their needs and their wishes. The Appellant pays $2,500 per month for her apartment, including all of the services in the package. If she, or any other resident, elected from the outset not to use any of the services, the monthly rent would be unaffected by that.

Ms. Dotzert produced two receipts made out to the Appellant by the Renoir, which she had signed, one for each of the years under appeal. These purport to show that the Appellant had paid $15,000 for rent and $15,000 for attendant care services in each of 1994 and 1995. The appeals were pursued on the basis that the real amount of the Appellant’s claim in each year was $15,000, not the $30,000 originally claimed by her in filing her returns. Ms. Dotzert testified that she had prepared these receipts at year end for income tax purposes, and that the breakdown of the amount paid by the Appellant had been decided upon by her, with help from an accountant, on the basis of the relative cost of the Renoir of the supply of the apartment, and the supply of the attendant care service package. I give this part of her evidence no weight. It was not established that she has any expertise that would enable her to make this kind of financial analysis; the accountant who assisted her did not testify. It strikes me as unlikely in the extreme that any proper allocation of the costs between the apartment itself and the attendant care package would yield a division of exactly 50% to each. Moreover, these receipts do not reflect the reality of the contractual arrangement entered into between the Appellant and the Renoir.

It is clear from the evidence of Ms. Dotzert that the Appellant did not contract to pay $15,000 for the rent of an apartment, and another $15,000 for the attendant care package. The Renoir simply does not operate on that basis. I understood Ms. Dotzert’s evidence to be that the Appellant, and all the other residents as well, entered into a lease with the Renoir pursuant to the Residential Tenancies Act of Alberta, and that the rent for their apartments is spelled out in that lease to be, in the Appellant’s case, $2,500 per month. The Appellant’s counsel did not put the lease, or any other contractual document, into evidence. I assume it would not have advanced her case to do so. [1] I find the Appellant paid $30,000 to the Renoir in each of the years under appeal and that she paid it for the rent of an apartment. Along with possession of her apartment, she is entitled to, and she in fact does, make use of certain services (described as the attendant care package) which the building management provides, but she makes no specific payment for any or all of these, distinct from the rent she pays for the apartment. It follows that there is no “amount” that was paid by her as remuneration for attendant care services in either 1994 or 1995. What is permitted to be deducted by sub section 118.2(2) of the Act is “an amount paid ... as remuneration for one full-time attendant” in the case of paragraph (b), or “an amount paid ... as remuneration for attendant care” under paragraph 0.1). The Appellant, on the facts, therefore, does not come within the plain words of either of the provisions which afford the deduction which she seeks.

While this is sufficient to dispose of these appeals, I should add there is another reason why, in my view, the appeals cannot succeed under paragraph (b). The wording of that paragraph makes it abundantly clear that it provides a deduction only for remuneration paid for an attendant who provides care to the taxpayer on a full-time basis. Although the expression “full-time” is in some contexts capable of more than one meaning, [2] I find no ambiguity in its use in this provision. It is clearly intended that the deduction will be available only where the payment is made to someone who, while on duty, is attending to the taxpayer and no one else. It is clear from the evidence that this is not the situation in the case at bar. Even if the Appellant could establish some amount as having been paid by her for attendant care services, it would not fall within paragraph 118.2(2)(£») of the Act.

I do not think that in an informal appeal I should venture an unnecessary opinion as to the meaning of paragraph 0.1), and what specific “attendant care” is covered by it. For the reasons that I have given above, the appeals cannot succeed under that paragraph even if some, or even all, of the “attendant care service package” were to come within that expression as used by Parliament. I note parenthetically, however, that if any part of the Appel- lant’s rent payments to the Renoir were found to fall within paragraph 0.1), the deduction available under it is limited to a maximum amount of $5,000 in any one taxation year during the lifetime of a taxpayer.

For all of these reasons, I conclude that the Appellant is not entitled to any deduction in respect of amounts paid by her to the Renoir in the years under appeal. The appeals are dismissed.

Appeal dismissed.