Citation: 2012 TCC 301
Date: 20120822
Docket: 2011-2806(IT)I
BETWEEN:
MARIA LUCARELLI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
The appellant, Maria Lucarelli,
claimed a medical expense tax credit in respect of tuition paid to a
specialized private school for one of her children who had been diagnosed with
a learning disability. The Minister of National Revenue disallowed the credit
in a reassessment for the 2009 taxation year.
[2]
Paragraph 118.2(2)(e) of the Income
Tax Act describes the expense which Ms. Lucarelli claimed. It reads:
118.2(2)
Medical expenses -
For the purposes of subsection (1), a medical expense of an individual is an
amount paid
[…]
(e) [school, institution,
etc.] - 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;
[3]
The issue in the appeal centres on
the requirement of a certificate from an appropriately qualified person. In
this case, several letters were written by professionals concerning the child’s
requirements. The Crown submits that the letters are not specific enough to
satisfy the certification requirement.
[4]
It is not in dispute that the
circumstances of this case are sympathetic. It is clear that the child required
specialized care and training for a learning disability and that the school in
question was able to provide this. The problem, according to the Crown, is
simply that the certification requirement was not satisfied.
Background facts
[5]
In 2007, a doctor recommended to
Ms. Lucarelli that her seven year old child be assessed for a learning
disability by Dr. Nancy Johnston, who is a registered psychologist affiliated
with Brock University.
[6]
Following an extensive investigation, Dr. Johnston issued a
well-written and detailed report which confirmed several problem areas, most
notably, a “severe deficit in the area of reading and writing.” At the end of
the report, Dr. Johnston made eight specific recommendations. The one that is
most relevant to this appeal is reproduced below.
It is suggested that
an Identification Placement and Review Committee (IPRC) meeting be held in
order to develop an Individual Education Plan (IEP) for X. He will need some
individual learning resource support in order to bypass his areas of problems
and increase coping skills and compensatory approaches.
[7]
It appears that the
meeting with the IPRC did not take place. Instead, Dr. Johnston approved that the child remain at his current
Montessori school provided that the school could provide remedial assistance.
The child received this assistance, and he stayed at that school for two years
during which there was improvement especially in motor skills. There was less
improvement in the area of reading and writing.
[8]
In November 2008, the child was
assessed by professionals at the Dyslexia Resource Centre. They confirmed that
the child’s reading skills had not significantly improved since he was assessed
by Dr. Johnston. The new assessment was less extensive, and less costly, than
the original assessment by Dr. Johnston.
[9]
Ms. Lucarelli had to find a new
school for her child beginning September 2009 since the Montessori school only
taught younger children. She undertook an extensive search and considered many
options, including the local public school.
[10]
The school that was selected was TALC Academy, which is a private school that specializes in education for children with the
same type of learning disability that Ms. Lucarelli’s child had. The school was
within commuting distance.
[11]
Ms. Lucarelli paid tuition to TALC Academy in the amount of $6,125 for the fall term in 2009. It is this amount that is
at issue in the appeal.
[12]
The child has continued to attend
the TALC Academy since the initial term in 2009. He has done extremely well
there, and it is expected that he will be able to continue on in high school in
the public system.
[13]
The principal of the TALC Academy, David Fisher, testified at the hearing. In respect of the certification
requirement, he stated that each year he provides a letter to parents which
enables them to claim the medical expense tax credit. The letter provided to
Ms. Lucarelli states in part:
[…] In order to be
successful and reach his potential, X needs to have the specialized programming
that is available at TALC Academy. […]
[14]
In support of her tax claim, in
2010 Ms. Lucarelli requested a further letter from Dr. Johnston which
specifically addressed TALC Academy. Apparently, Dr. Johnston had not been
aware of this school when the initial report was written. Dr. Johnston wrote:
It
was with great pleasure that I learned that X is continuing to progress well in
a program that provides him with an individual educational environment where
his specific learning disability can be accommodated. The opportunity to
bypass his areas of disability, while learning freely in the domains where he
excels, will not only allow him to grow according to his capacity, but will
also support his social/emotional development and his self-esteem.
The
program you described at the “TALC School” follows several recommendations made
in my psychological report of 2007. With the attitudinal and academic growth
he is currently achieving, I feel confident that a transition to his community
school will occur in the near future.
As
parents, you deserve recognition for meeting the driving and financial demands
needed to allow X this much needed opportunity. Hoping that our province and
community will support you in your goal or providing X with the opportunity to
fulfill his potential.
Analysis
[15]
It may be useful to first make a
general comment about the availability of the medical expense tax credit for
tuition paid to a school such as the TALC Academy, which focuses on reading and
writing disabilities. This type of school was found to qualify in a decision of
Sobier J. in Rannelli v The Queen, 91 DTC 816 (TCC). The Crown takes no
issue with this.
[16]
As for the certification
requirement, which is at issue in this appeal, this requirement has been the
subject of several court decisions, many of which were brought to my attention
by the parties.
[17]
A good starting point for
considering the certificate requirement is the following comment of Sharlow
J.A. in Title Estate v The Queen, 2001 FCA 106, 2001 DTC 5236:
[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. The
certificates in this case are simply too vague to meet that requirement.
[18]
I would also mention that in Lang
v The Queen, 2009 TCC 182, 2009 DTC 1127, C. Miller J. expressed the view
that the certificate must also specify the particular school that is at issue.
His reasoning is that Parliament expected an expert to provide this and not a
judge.
[19]
The Crown did not rely on Lang in
this appeal. Instead, counsel’s argument was that the specialized training that
was required was not set out in sufficient detail in Dr. Johnston’s report.
Another factor was that the report was prepared two years before the child was
enrolled in the TALC Academy.
[20]
In this case, I am satisfied that
the certificate requirement has been satisfied by a combination of the initial
report by Dr. Johnston and the follow up assessment by the Dyslexia Resource
Centre. Dr. Johnston’s report was very detailed in setting out the exact
difficulties experienced by the child, and she suggested that individualized
training be provided which bypassed the problem areas.
[21]
Although neither assessment
evaluated particular schools, the evidence of the principal of the TALC Academy made it clear that the methodology of the school was to do precisely what Dr.
Johnston had recommended, which was to teach in a way that bypassed the child’s
problem areas. As an example, examinations were administered by providing the
questions orally rather than in writing. Dr. Johnston wrote in great detail
about the problem areas and it appears that the TALC Academy specifically
addressed these in the manner which Dr. Johnston had recommended. Dr.
Johnston’s follow up letter supports this conclusion.
[22]
It seems to me that the
legislative requirements are satisfied in circumstances where Dr. Johnston’s
report specifies the nature of the disability and the type of training that is required,
and the evidence establishes that the TALC Academy specializes in providing
this type of training for children with this disability.
[23]
As for the period of time between
Dr. Johnston’s report and the child’s enrollment at the TALC Academy, the second assessment by the Dyslexia Resource Centre in November 2008 goes a long way
to fill that gap.
[24]
I am satisfied that the initial
assessment by Dr. Johnston and the follow up assessment by the Dyslexia
Resource Centre satisfy the certification requirement in s. 118.2(2)(e) of the Act.
The appeal will be allowed, with costs.
Signed at Toronto, Ontario this 22nd day of August 2012.
“J. M. Woods”
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