REASONS
FOR JUDGMENT
Woods J.
I. Introduction
[1]
Elim Housing Society (“Elim”) is a
British Columbia non-profit organization that operates residential care facilities,
including a long-term care facility called The Harrison. This appeal under the Excise
Tax Act (the “Act”) concerns Elim’s entitlement to a public service body rebate with
respect to this facility.
[2]
For purposes of goods and services tax (GST) and
harmonized sales tax (HST) under the Act, Elim claimed public service
body rebates with respect to The Harrison on the basis that its supplies are
encompassed by the term “facility
supply,” as that term is defined in subsection
259(1) of the Act. Elim has been reassessed to reduce the amount of
eligible rebates on the basis that The Harrison did not make facility supplies.
[3]
There are two claim periods at issue, 2009 and
2011. For 2009, the GST was in effect and the rebate with respect to The Harrison
was reduced from 83 percent to 50 percent. For 2011, the HST was in effect and
the rebate was similarly reduced. It is not necessary that I outline the
specifics of the HST reduction. For convenience, I will refer to the rebate claimed
by Elim as the “83 percent
rebate” and the rebate that was assessed as the “50 percent rebate.”
[4]
It appears that the amounts at issue with
respect to The Harrison are approximately $293,337 for 2009 (related to the
construction of the facility) and $13,775 for 2011 (Ex. R‑1, Tabs 5, 6).
[5]
For the information of readers, counsel advised
at the commencement of the hearing that several long-term care facilities have
outstanding tax disputes similar to this one which may be affected by the
outcome of this appeal.
[6]
Prior to the hearing, the parties settled a
separate rebate issue with respect to another of Elim’s residential facilities,
The Emerald, which is an assisted living facility. This issue was settled in
Elim’s favour on the basis that The Emerald was a health care facility that
qualified for the 50 percent rebate. The claim periods at issue are 2007 and
2011.
II. Applicable
legislation
A. Background
[7]
The relevant legislation, which became effective
in 2005, expanded the types of facilities that qualified for the 83 percent
rebate. Prior to this, only facilities that were designated as hospital
authorities qualified for this rebate.
[8]
When the legislative amendments were announced,
the Department of Finance described the amendments as reflecting the fact that
some services traditionally provided by hospitals were now being performed by
other non-profit entities.
[9]
As explained in the Supplementary Information to
the 2005 federal budget, the legislation is meant to accommodate “significant
variations in health care delivery models across the country,” and it
lists seven types of facilities that now qualify for the high rate. The
category that is relevant to this appeal is described in the Supplementary
Information as a facility that offers “high-level therapeutic care.” (Supplementary
Information, Annex 8, p. 406, 407.)
[10]
An entity such as Elim qualifies for rebates
because it is a non-profit organization that receives government funding to
operate a health care facility. As will be described below, the essential
question in this appeal is whether The Harrison provides a sufficiently high level
of care to satisfy the requirements in the 2005 amendments for the enhanced 83
percent rebate.
B. Legislative provisions
[11]
The essential issue in this appeal is whether
services ordinarily rendered at The Harrison are a “facility
supply,” as that term is defined in s. 259(1) of the Act. The provision is
reproduced below.
259. [Public service body rebate] – (1) Definitions – In this section,
[…]
"facility
supply" means an exempt supply (other than a
prescribed supply) of property or a service in respect of which
(a) the property is made available, or the service is rendered, to
an individual at a public hospital or qualifying facility as part of a
medically necessary process of health care for the individual for the purpose
of maintaining health, preventing disease, diagnosing or treating an injury,
illness or disability or providing palliative health care, which process
(i) is undertaken in whole or in part at the public hospital or
qualifying facility,
(ii) is reasonably expected to take place under the active direction
or supervision, or with the active involvement, of
(A) a physician
acting in the course of the practise of medicine,
(B) a midwife
acting in the course of the practise of midwifery,
(C) if a physician is not readily accessible in the geographic area
in which the process takes place, a nurse practitioner acting in the course of
the practise of a nurse practitioner, or
(D) a prescribed
person acting in prescribed circumstances, and
(iii) in the case of chronic care that requires the individual to
stay overnight at the public hospital or qualifying facility, requires or is
reasonably expected to require that
(A) a registered nurse be at the public hospital or qualifying
facility at all times when the individual is at the public hospital or qualifying
facility,
(B) a physician or, if a physician is not readily accessible in the
geographic area in which the process takes place, a nurse practitioner, be at,
or be on-call to attend at, the public hospital or qualifying facility at all
times when the individual is at the public hospital or qualifying facility,
(C) throughout the process, the individual be subject to medical
management and receive a range of therapeutic health care services that
includes registered nursing care, and
(D) it not be the case that all or substantially all of each
calendar day or part during which the individual stays at the public hospital
or qualifying facility is time during which the individual does not receive
therapeutic health care services referred to in clause (C), and
(b) if the supplier does not operate the public hospital or
qualifying facility, an amount, other than a nominal amount, is paid or payable
as medical funding to the supplier;
[…]
[12]
Although the term “facility supply” is at the
heart of this dispute, it is desirable to briefly describe the legislative
trail that leads to this definition.
[13]
I begin with subsection 259(3) of the Act
which provides for rebates of specified percentages. It is sufficient to
reproduce the provision as it read for the 2009 claim period. It provides:
259.(3) Rebate
for persons other than designated municipalities - If
a person (other than a listed financial institution, a registrant prescribed
for the purposes of subsection 188(5) and a person designated to be a
municipality for the purposes of this section) is, on the last day of a claim
period of the person or of the person's fiscal year that includes that claim
period, a selected public service body, charity or qualifying non-profit
organization, the Minister shall, subject to subsections (4.1) to (4.21) and
(5), pay a rebate to the person equal to the total of
(a) the amount equal to the specified percentage of the non-
creditable tax charged in respect of property or a service (other than a
prescribed property or service) for the claim period, and
(b) the amount equal to the specified provincial percentage
of the non-creditable tax charged in respect of property or a service (other
than a prescribed property or service) for the claim period.
[Emphasis added]
[14]
Elim qualifies for rebates under the provision
above because it is a “charity” within an expanded definition of that term in s. 259(1), which
definition includes a non-profit organization that operates a health care
facility.
"charity" includes a non-profit organization that operates, otherwise than
for profit, a health care facility within the meaning of paragraph (c) of the
definition of that expression in section 1 of Part II of Schedule V;
[15]
The definition of “health care
facility” is set out below from section 1 of Part II of Schedule V to
the Act.
"health care facility" means
(a) a facility, or a part thereof, operated for the purpose of
providing medical or hospital care, including acute, rehabilitative or chronic
care,
(b) a hospital or institution primarily for individuals with a
mental health disability, or
(c) a facility, or a part thereof, operated for the purpose of providing
residents of the facility who have limited physical or mental capacity for
self-supervision and self-care with
(i) nursing and personal care under the direction or supervision of
qualified medical and nursing care staff or other personal and supervisory care
(other than domestic services of an ordinary household nature) according to the
individual requirements of the residents,
(ii) assistance with the activities of daily living and social,
recreational and other related services to meet the psycho-social needs of the
residents, and
(iii) meals and accommodation;
[16]
Subsection 259(1) provides for specific rebate percentages
that vary depending on the type of public service body. It reads:
"specified percentage" means
(a) in the case
of a charity or a qualifying non-profit organization that is not a
selected public service body, 50%,
(b) in the case
of a hospital authority, a facility operator or an external supplier, 83%,
(c) in the case
of a school authority, 68%,
(d) in the case
of a university or public college, 67%, and
(e) in the case
of a municipality, 100%;
[Emphasis added]
[17]
It is worth mentioning that the rebates apply to
Elim, and not The Harrison. This is significant because Elim has other
operations. It appears that this may have been a drafting oversight which was
corrected by retroactive amendments that restricted the rebates to particular
activities (subsections 259(4.11) and (4.12) of the Act). Nothing turns
on this in this appeal.
[18]
Elim takes the position that its specified
percentage is 83 percent since it qualifies as a “facility
operator” with respect to The Harrison. The Crown submits that Elim is not a facility operator and only
qualifies for a specified percentage of 50 percent as a charity.
[19]
A “facility operator” includes a charity that
operates a “qualifying facility.” The definition of “facility operator” is reproduced from s. 259(1):
"facility
operator" means a charity, a public
institution or a qualifying non-profit organization (other than a hospital
authority), that operates a qualifying facility;
[Emphasis added]
[20]
In summary, since Elim is a charity, as defined,
it will qualify as a facility operator if it operates a qualifying facility. The
conditions for being a “qualifying facility” are set out in s. 259(2.1) of the Act. Paragraph (a) of this
provision refers to a “facility supply” which, as mentioned above, is at the heart of this litigation.
Subsection 259(2.1) is reproduced below.
259.(2.1)
Qualifying facilities - For the purposes of this
section, a facility, or part of a facility, other than a public
hospital, is a qualifying facility for a fiscal year, or any part of a
fiscal year, of the operator of the facility or part, if
(a) supplies of services that are ordinarily rendered during that
fiscal year or part to the public at the facility or part would be facility
supplies if the references in the definition "facility supply" in
subsection (1) to "public hospital or qualifying facility" were
references to the facility or part;
(b) an amount, other than a nominal amount, is paid or payable to
the operator as qualifying funding in respect of the facility or part for the
fiscal year or part; and
(c) an accreditation,
licence or other authorization that is recognized or provided for under a law
of Canada or a province in respect of facilities for the provision of health
care services applies to the facility or part during that fiscal year or part.
[Emphasis added]
[21]
A few additional points should complete the
legislative summary. First, a “facility supply” refers to a single supply to an individual. The tie in to services as
a whole is found in subsection 259(2.1) of the Act which refers to supplies
of services “ordinarily rendered” at a facility.
[22]
Second, subsection 259(2.1) of the Act
refers to services ordinarily rendered at the facility or “part” of the
facility. Neither party suggests that the reference to “part” of a facility
has any relevance to this appeal.
[23]
Third, the reference to “exempt
supply” in the definition of “facility supply” is not at
issue. The Crown acknowledges that the supplies at The Harrison are generally
exempt supplies because they are made by a charity.
III. Positions
of parties
[24]
Elim submits that it satisfies all of the
requirements to qualify for the 83 percent rebate with respect to The
Harrison.
[25]
The Crown takes issue with several of the
required elements in the definition of “facility supply.” The disputed elements are
listed below.
•
The supplies by The Harrison are not part of a
medically necessary process of health care.
•
The process of medically necessary health care
is not reasonably expected:
•
to take place under the active direction or
supervision, or with the active involvement, of a physician,
•
to require that residents be subject to medical
management throughout the process, and
•
to require that residents receive a range of therapeutic
health care services and that such services are provided for the required minimum
number of hours each day.
IV. Factual
background
A. Introduction
[26]
The witnesses at the hearing, all of whom were
called by Elim, were: (1) Larry Gustavson, a physician who works in a
senior administrative capacity for the Fraser Health Authority, which is the
government agency responsible for The Harrison; (2) Mark Blinkhorn, a physician
and the Medical Director at The Harrison; (3) Hilde Wiebe, a registered nurse
and the Director of Care at The Harrison during the relevant period; and (4)
Shannon Dueck, the Director of Recreation at The Harrison. The evidence also
included extensive documentation and excerpts from the discovery of Ms. Wiebe
and Ron Pike, who is the Executive Director of The Harrison.
[27]
I find the testimony of all the witnesses to be
reliable. As for Dr. Blinkhorn in particular, he had an unfortunate
tendency during his testimony to describe care services using terms that are in
dispute in this litigation (e.g., “therapeutic”). Although these legislative references were not helpful to Elim’s
case, they did not affect the general reliability of Dr. Blinkhorn’s testimony,
especially bearing in mind the natural tendency of witnesses to present their “side” in the
best light.
[28]
I turn now to findings of fact. The Harrison is
generally referred to as a long-term care facility and has a capacity of 118
residents. Elim receives provincial government funding for a portion of The
Harrison’s residents. There is no difference in the services provided for
residents who are funded and those who are not, and nothing turns on this in
this appeal.
[29]
Virtually all of the residents at The Harrison
are elderly and the vast majority suffer from dementia. The residents are
generally frail and usually have complex medical problems. Their life
expectancy is generally between three months and three years.
[30]
All of the residents at The Harrison have
conditions that require “complex care” as that term is described in a policy manual by the
B.C. Ministry of Health Services (the “Policy Manual”) (Home and
Community Care Policy Manual, Ex. A-1, Tab 2).
[31]
Most of the residents at The Harrison fall into
one of three categories of complex care, which are set out below from the
Policy Manual. It will be noted that the categories are not black and white and
require the exercise of some judgment. In all cases, however, the residents are
extremely dependent on care either by reason of mental or physical impairments,
or both.
[…]
Complex care
refers to the increasing levels of resources needed to meet the specialized
care requirements of specific individuals. Complex care recognizes individuals
whose needs fall within one of 5 possible groupings of care requirements. All
groupings require 24 hour supervision and continuous professional care in a
care facility environment.
Complex Care
Groupings
[…]
Group B
A person who has
cognitive impairment, ranging from moderate to severe but who is socially
appropriate. The person may or may not be independently mobile with use of
ambulatory aids. Assessment indicators for this grouping include that the
person:
•
is unable to direct own care;
•
is unable to communicate their own needs;
•
needs considerable directional assistance,
supervision of activities, and requires considerable staff time due to impaired
comprehension;
•
requires total care in their activities of daily
living (ADL dependent with transfer, mobility, feeding, toileting);
•
requires secure environment for self protection.
Group C
A person who has
cognitive impairment, ranging from moderate to severe but who is socially
inappropriate. The person may or may not be independently mobile with
assistance. Assessment indicators for this grouping include that the person:
•
is unable to direct own care;
•
is unable to communicate own needs;
•
needs considerable directional assistance,
supervision of activities, and requires considerable staff time due to impaired
comprehension;
•
requires total care in their activities of daily
living (ADL dependent with transfer, mobility, feeding, toileting);
•
exhibits anti-social habits such as spitting,
voiding and/or defecating in public, indecent exposure, etc.;
•
if ambulant, needs a secure environment for self
protection;
•
may misappropriate the property of others.
Group D
A person who is
physically dependent but cognitively intact with medical needs that require
professional nursing, and whose condition requires a planned program to retain
or improve functional ability. Assessment indicators for this grouping include
that the person:
•
is unable to use a wheelchair independently
and/or needs 2 person transfer;
•
requires professional nursing care for monitoring
and for extensive interventions daily; for example requires ostomy care,
decubitus ulcer care, nursing care to prevent pressure areas, oxygen therapy,
enteral feeding, bowel and bladder management;
•
requires supervision by other health workers such
as an Occupational therapist or Physiotherapist.
[…]
B. Care services at The
Harrison
[32]
This section sets out the care services that are
available at The Harrison. The description below is from Elim’s policy on
standard of care at The Harrison (Ex. A-1, Tab 15).
[…]
4.1 Medical Services:
Each resident is under the care of a licensed physician. Medical
Services are coordinated by four in-house physicians. The Advisory and Safety
Committee provides a forum for communication and dialogue on matters pertaining
to the delivery of medical care within the facility and obtained in the
community.
4.2 Wellness
Services:
Wellness programs provide residents with a continuum of therapeutic
recreation and activities. For complex care residents, specialized
recreation/wellness activities are developed because residents may require
assistance and/or adaptive devices in order to participate because of physical
limitations or cognitive impairment. Wellness aides provide individual and
group wellness programs on each neighbourhood.
4.3 Physio
and Occupational Therapy Services:
Physio and Occupational Therapy services (PT/OT) are available on a
fee for service basis.
4.4 Pastoral
Care Services:
The Harrison Pastoral Care program provides spiritual care programs
and responds to the spiritual needs of residents, families, and staff. The
program is coordinated under The Harrison Chaplain.
4.5 Dietetics:
The dietician is a contracted service and responsible for assessing
the nutritional needs of each resident.
4.6 Nursing:
Nursing
services are as follows:
•
DOC [Director of Care] is responsible for the
overall management and coordination of resident care and Wellness program at
The Harrison.
•
Care Coordinator provides overall direction in
the day-to-day provision and coordination of residents care at The Harrison.
•
Team Leaders (RNs/LPNs) provide resident
assessment and care including medication and treatments as well as
communication with physicians and other professionals related to resident
needs.
•
Resident Care Aides (RCAs) provided direct
resident care.
4.7 Pharmacy
Services:
Rexall Pharmacy provides pharmaceutical services as ordered by the
resident’s individual physician. Residents are billed through their individual
MSP plan. Rexall also provides a Pharmacist who serves as a clinical resource
and participates in med reviews and other core planning or operational
committees. Rexall also supports staff education.
4.8 Laboratory/Diagnostic
Services:
The Harrison
BC Bio Laboratory provides once a week on-site lab services.
Residents access community based diagnostic services or are transferred to
Surrey Memorial Hospital.
4.9 Music
Therapy:
The Music Therapist plans and implements music therapy programs and
services by methods such as improvisation, guided imagery and grief and loss
support for individuals and/or groups.
[…]
C. Care providers at The
Harrison
[33]
The Harrison is required by government
regulation to have a nurse on duty at all times, and each resident is required
to have a physician who agrees to be on call.
[34]
In order to give some idea of the number of care
providers at The Harrison, Elim provided a sample staffing plan. The summary
below is based on staffing for day shifts at The Harrison.
[35]
The Harrison has approximately 5 nurses
(registered or licensed) and 16 care aides available to provide care during the
day. All residents are checked by the care staff on an hourly basis (24/7). The
Harrison also has 3 recreation aides and a rehabilitation worker (R-1, Tab 33).
[36]
Other types of care providers are contracted out
by The Harrison. These include a physiotherapist, a music therapist and a
dietician.
[37]
During the periods at issue, The Harrison
received government funding for care staff equivalent to 2.8 care hours per day
per “funded” resident. This amount was based on The Harrison’s scheduled staffing
hours.
[38]
As for physicians, most residents use one of
four physicians who have an arrangement with The Harrison to be available for
residents who choose their services. These physicians make regular visits to
the facility, roughly on a bi‑weekly basis. Some residents have other
physicians, which is permitted as long as the physician agrees to be on call.
In addition to regular visits, the physicians are regularly contacted by the
nursing staff for prescriptions and advice.
D. The process of care
[39]
The care services at The Harrison are highly
regulated by the provincial government. The residents must have health
assessments and care plans must be developed to address health concerns; detailed
records must be kept of the implementation of the care plans; there must be medication
reviews every six months and inter-disciplinary meetings must be held annually.
In addition, some of the records must be sent quarterly to the relevant
government authority.
[40]
According to the testimony of Dr. Blinkhorn,
which I accept, the residents at The Harrison generally:
•
have diagnoses that
include several diseases;
•
are frail and at risk
of falls;
•
have skin that is
prone to tears;
•
suffer from dementia
and have impaired cognition;
•
have impaired sensory
function;
•
often have severe impaired
mobility; and
•
often suffer from
depression.
[41]
Some records with respect to three of the
residents were entered into evidence by both parties. These exhibits have been sealed
to protect confidentiality.
[42]
The most complete care records are for one resident
listed at Tab 77 of Ex. R-2. These records suggest that the day-to-day
care of this resident was planned with great care and detail in order to
alleviate medical concerns. The care plan provides for specific action (called
intervention) for the following problems:
•
allergic reactions
(goal no reactions);
•
fall risk (goal no falls);
•
choking risk (goal to
prevent aspiration);
•
pain management (goal
to resolve within one hour);
•
bathing (requires two
person assistance; goal for resident to bathe one limb, bathe safely, and be
clean and neat);
•
mobility (goal to walk
3 feet with assistance, be in chair for 60 minutes per day, and move about in
bed without assistance);
•
transferring (goal to
receive appropriate assistance);
•
incontinence (goal of
no infection, be clean and dry);
•
dental (goal to eat
and drink free of pain);
•
dehydration risk (goal
to maintain a minimum fluid intake);
•
nutrition concerns
(goal to address several medical issues);
•
skin integrity issues
(goal to reduce risk of skin breakdown);
•
wound from surgery
(goal to heal properly).
[43]
In addition to the care above provided by the
staff, the resident referred to at Tab 77 received regular visits from Dr.
Blinkhorn approximately every two weeks. Dr. Blinkhorn also attended inter-disciplinary
meetings and medication reviews. This is documented in Dr. Blinkhorn’s notes at
Ex. R-2, Tab 64.
[44]
Many of Dr. Blinkhorn’s visits report no change
in the resident, but a significant number involve monitoring and/or treating
health concerns ranging from syringing the resident’s ears to addressing pain
and skin problems.
[45]
This particular resident is the only one for
which the evidence relating to health care provided appears to be relatively
complete. The evidence contains detailed charts and notes and includes the
testimony of Dr. Blinkhorn.
[46]
As for the evidence with respect to the other
two residents, I am not satisfied that it was complete, and these residents’
physicians did not testify. Accordingly, I am not satisfied that the evidence
regarding the other residents is detailed enough to be relied on as
representative for residents as a whole.
[47]
Dr. Blinkhorn testified that the health
condition of the resident at Tab 77 was in the middle of the range for
residents at The Harrison. I have concluded that the care provided to this resident,
as reflected in the evidence, is generally representative of the care provided
at The Harrison. Either party could have provided additional evidence if this
was not the case.
V. Analysis
A. Introduction
[48]
As described above, the definition of “facility supply” contains several elements that
must be satisfied in order for Elim to qualify for the 83 percent rebate with
respect to The Harrison.
[49]
The dispute between the parties relates to
several of these elements, both from the perspective of the proper interpretation
of the legislation and its application to the facts in this case. This analysis
focusses on the disputed elements listed below.
•
The services provided to a resident by The
Harrison must be part of a medically necessary process of health care.
•
The health care process must reasonably be
expected to take place under the active direction or supervision, or with the
active involvement, of a physician.
•
The health care process must reasonably be
expected to require that, throughout the process, the resident be subject to
medical management and receive a range of therapeutic health care services.
•
It is reasonably expected that the health care
process will require that the resident receive a significant amount of therapeutic
health care services on a daily basis. The concept of significant is expressed
in the legislation by the term “all or substantially all.”
[50]
These elements will be discussed separately, but
first I will briefly summarize my conclusion.
[51]
I would first observe that some of the disputed
parts of the legislation use very broad terms, such as “active” and “therapeutic.”
[52]
The Crown argues for restrictive meanings of
these terms. In my respectful view, if Parliament wished that these terms be
given the restrictive meanings suggested by the Crown, different legislative wording
would have been used.
[53]
One of the central arguments made by the Crown
for a restrictive interpretation is that this better reflects the legislative
intent as expressed in budget documents. In particular, the Crown suggests that
the facility must provide services that were traditionally provided by
hospitals.
[54]
In my view, this is not supported by the
legislation. The legislation makes no reference to services provided by
hospitals. It is not appropriate to read this requirement into the legislation,
since this would cross the line from judicial interpretation to impermissible
legislative drafting (Canada (Attorney General) v. Friends of the Canadian
Wheat Board, 2012 FCA 183, at para. 40).
[55]
Further, as pointed out by Elim’s counsel, the
Crown led no evidence as to what services were traditionally provided by
hospitals. Accordingly, the Crown’s argument concerning hospital services is
not supported by the law or the evidence.
[56]
Second, I disagree with the Crown’s position regarding
the facts of this case. In my view, this position understates the level of the care
and the medical aspects of the care that is provided to the residents of The
Harrison.
[57]
The Crown submits that The Harrison provides
nursing care and not medical care, and that this type of care is not encompassed
by the definition of “facility supply.” In my view, this argument downplays the role of the physicians in
the care of the residents at The Harrison. Although physicians are not employed
by The Harrison, the physicians play an important role in the health care team.
This level of participation satisfies the legislative requirements, in my view.
[58]
Having outlined my conclusion that Elim
qualifies for the 83 percent rebate with respect to The Harrison, I will now consider
the specific elements of “facility supply” that are in dispute.
B. Does Elim provide a
medically necessary process of health care?
[59]
In order for Elim to qualify for the 83 percent
rebate, The Harrison must make supplies of property or services that satisfy
the requirement in paragraph (a) of the definition of “facility
supply” excerpted below.
[…]
(a) […] the
property is made available, or the service is rendered, to an individual at a
public hospital or qualifying facility as part of a medically necessary
process of health care for the individual for the purpose of maintaining
health, preventing disease, diagnosing or treating an injury, illness or
disability or providing palliative health care, […]
[Emphasis
added]
[60]
The essence of the disagreement between the
parties is whether the health care provided by The Harrison is medically
necessary.
[61]
What is meant by the term “medically
necessary”? The
difficulty with this language is that it is extremely broad. A simple example
is a supply of food and drink, which may be considered a health care service
that is medically necessary.
[62]
In the case of The Harrison, it makes sense in
my view to look at the nature of the care services provided and determine the
extent to which they address medical concerns.
[63]
The process of health care that is provided to
residents at The Harrison is intensive care throughout the day and night to
best maintain the health of individuals who are nearing the end of their lives
and who are generally in poor medical condition. Generally, the health of the
residents is fragile and they are at risk for a number of medical problems,
such as choking, skin wounds, infections, complications from medical conditions,
and complications from falls. Much of the care at The Harrison is delivered
through care plans, created by nurses, and which are tailored to address
specific medical concerns. The health care process provided to residents is
medically necessary, in my view.
[64]
The Crown suggests that the term “medically
necessary” should mean
medically necessary as determined by a physician (Respondent’s Written
Submissions, para. 91). I reject this interpretation because it is not
supported by the legislation.
C. Is there active direction,
supervision or involvement of physicians?
[65]
Subparagraph (a)(ii) of the definition of “facility
supply” requires that the health care process be reasonably expected to
take place under the “active direction or supervision,” or with the “active
involvement” of a physician. The provision is reproduced below.
(a) […] which process
[…]
(ii) is reasonably expected to take place under the active direction
or supervision, or with the active involvement, of
(A) a physician
acting in the course of the practise of medicine,
(B) a midwife
acting in the course of the practise of midwifery,
(C) if a physician is not readily accessible in the geographic area
in which the process takes place, a nurse practitioner acting in the course of
the practise of a nurse practitioner, or
(D) a prescribed
person acting in prescribed circumstances, and
[…]
[66]
This element involves looking at the
medically necessary process of health care and considering the nature of the
involvement of the physician. The element has two requirements: (1) that the
physician is reasonably expected to be involved in the health care process, and
(2) that such involvement is “active.”
[67]
The Crown
concedes that physicians are involved in the health care process at The
Harrison. The dispute is whether such involvement is “active.”
[68]
Given that Parliament used a general term such
as “active,” it
is clear that Parliament did not envisage a bright line test. Moreover, the
term “active”
potentially has a very wide meaning. There is no good reason for it to be given
an unduly narrow interpretation, in my view.
[69]
The evidence concerning the role of physicians
at The Harrison was provided mainly by Dr. Blinkhorn.
[70]
The majority of residents at The Harrison use
the physicians associated with the facility. However, some residents have
physicians who are not connected with the facility. It may be that these
residents wish to retain the services of a physician with whom they have an
existing relationship. I accept Dr. Blinkhorn’s testimony that many of
these residents decide later to switch to physicians associated with The
Harrison for practical reasons.
[71]
The health care process at The Harrison is
intensive and ongoing. In circumstances such as this, the requirement that the
physicians are expected to be “active” is
satisfied on the basis that the physicians’ involvement is frequent and
regular. The physicians generally have a pro-active approach by visiting their
patients roughly every two weeks. As well as seeing their patients, the
physicians would at the same time receive updates from the nursing staff at The
Harrison. In addition, the physicians are available at all times and
participate in The Harrison’s inter‑disciplinary meetings and medication
reviews.
[72]
The Crown suggests that the physicians’ visits
are generally of a routine nature. I think this downplays the importance of these
visits given the poor medical condition of the residents. In any event, routine
visits also contribute to satisfying the “active” requirement. If Parliament had intended a greater amount of physician
involvement, it would have clearly provided for it in the legislation.
[73]
The Crown also suggests that, given the policy
intent set out in budget materials, the term “active” means that only facilities established to provide medical or surgical
treatment qualify (Respondent’s Written Submissions, para. 85). This
interpretation is not supported by the words of the legislation. The key phrase
is “medically necessary process of health care.” This is broader than medical and surgical treatment.
[74]
The Crown implies that the role of physicians
who treat residents at The Harrison have a passive or incidental part in the
health care process (Respondent’s Written Submissions, para. 64). This view
does not reflect the true role of physicians in the health care process. The
physicians not only make themselves available at all times for the residents,
but through their regular visits and other interactions with the nursing staff,
the physicians would be very knowledgeable about the condition of their
patients and involved with their care.
[75]
Finally, the Crown submits that residents
admitted to The Harrison are required by regulation to be medically stable. Dr.
Blinkhorn expressed doubt that this accurately reflects the reality of the
situation, but in any event this requirement appears to only apply at the point
in time when the individual becomes a resident. The fact is that the life
expectancy of the residents at The Harrison is between three months and three
years. It is reasonable to expect that the residents will require substantial
medical care by a physician during this final stage of their lives.
D. Are residents subject to
medical management?
[76]
A further condition is only applicable to
chronic care facilities, which include The Harrison. The condition is that the
health care process must reasonably be expected to require that, throughout the
process, the resident be subject to medical management. The relevant provision
is reproduced below.
[…]
(iii) in the case of chronic care that requires the individual to
stay overnight at the public hospital or qualifying facility, requires or is
reasonably expected to require that
[…]
(C) throughout the process, the individual be subject to medical
management […]
[…]
[77]
This requirement is satisfied in respect of the
residents at The Harrison. Medical management is demonstrated by the fact that
residents are required to have a physician on call at all times and The
Harrison is required to have inter‑disciplinary meetings for each
resident annually, which generally involve the attendance of a physician. In
addition, the residents at The Harrison who have physicians associated with The
Harrison are visited regularly by physicians and during the visits the
physicians are kept up-to-date by the nursing staff. The health care process is
a team approach, which includes nurses and physicians.
[78]
It is worth mentioning that this legislative requirement
focusses on the resident. It is the resident who is required to be subject to medical
management, not the health care process. Accordingly, it is not necessary that the
physician have management of the health care process itself.
[79]
It is clear that residents at The Harrison are
generally subject to medical management and that this is reasonably expected to
be required by the health care process.
E. Do residents receive enough therapeutic
health care services?
[80]
There remain two disputed elements in the
definition of “facility supply,” both of which involve
the term “therapeutic health care services.” These elements are that the health
care process must reasonably be expected to require that the resident receive
both a range of therapeutic health care services throughout the process, and a
sufficient amount of therapeutic health care services during each calendar day.
[81]
The relevant legislative provisions are set out
below.
[…]
(iii) in the case of chronic care that requires the individual to
stay overnight at the public hospital or qualifying facility, requires or is
reasonably expected to require that
[…]
(C) throughout the
process, the individual […] receive a range of therapeutic health care services
that includes registered nursing care, and
(D) it not be the case
that all or substantially all of each calendar day or part during which the
individual stays at the public hospital or qualifying facility is time during
which the individual does not receive therapeutic health care services referred
to in clause (C),
[…]
[82]
It is first necessary to determine which care services
provided to residents of The Harrison, if any, are therapeutic health care
services.
[83]
The gist of the dispute between the parties is
whether the services provided by care aides at The Harrison, such as toileting
and bathing, are therapeutic health care services.
[84]
I begin the discussion with the ordinary meaning
of the terms “health care” and “therapeutic.”
[85]
As for “health care,” this term
is not defined in the legislation and the ordinary meaning is broad. The
Canadian Oxford Dictionary (2nd edition) defines “health care” as:
The maintenance
and improvement of health, esp. as administered by organized medical services
and facilities.
[86]
As for the term “therapeutic,” its
ordinary meaning is also very broad. As recently adopted by the Supreme Court
of Canada, the term “therapeutic” can mean “having a good effect on the mind or body”: Cuthbertson
v. Rasouli, 2013 SCC 53 (a decision concerning patient consent in the
context of life support measures). At paragraph 41, McLachlin C.J. wrote:
[41] The New
Oxford Dictionary of English (1998), defines “therapeutic” as “relating to the
healing of disease”, but also as “having a good effect on the body or mind” (p.
1922). Maintaining life support for Mr. Rasouli does not serve the purpose of
“healing of disease”. However, it can be argued that maintaining life support
has a “good effect on the body”, in the sense of keeping it alive.
[87]
The context in which the term “therapeutic” is used in
the legislation must also be considered. It is clear that Parliament intended the
term “therapeutic” to narrow the type of “health care” that will qualify; otherwise the modifier would not be used. In
other respects, the context supports the general, broad meaning of the term “therapeutic.”
[88]
An appropriate way to approach the issue in this
particular case is to consider the extent to which the care provided by the
care aides at The Harrison is expected to alleviate medical concerns.
[89]
Although the term “therapeutic
health care service”
would not always encompass assistance with toileting and bathing, it could
encompass these activities if the assistance is provided in such a way to take
into account medical concerns.
[90]
According to the evidence, many of the routine services
provided to residents by care aides apply nursing expertise to address
particular medical concerns. The care plans are developed by the nursing staff
and are implemented by the care aides. The plans are very detailed and
specifically address the special needs of The Harrison’s infirm residents. This
is reflected in the care plan set out at Tab 77 as summarized above.
[91]
It is not necessary in this appeal to give an
all-encompassing definition of the term “therapeutic.” As
reflected in Tab 77, the care that is provided by care aides at The Harrison is
of a different type than ordinary assistance with activities of daily living
that a more robust individual might require. I find that the level of expertise
that is reflected in the care plans that are implemented by the care aides satisfies
the requirement for a range of “therapeutic health care services.”
[92]
The Crown also submits that the term “therapeutic” has a
narrower meaning than that suggested above. The Crown suggests that the
ordinary meaning involves “an identification or diagnosis of a particular injury, illness,
disability or other health issue of an individual and it must be reasonable to
conclude that the service in question is rendered with the objective of
treating and curing that health condition or its symptoms.” (Respondent’s
Written Submissions, para. 122.)
[93]
Although the Crown referred to several authorities
in support of a narrow meaning of the term “therapeutic,” the Crown did not cite the relatively recent Supreme Court of
Canada decision in Rasouli, above. Instead, the Crown relied on the
lower court decision in Rasouli (Rasouli v. Sunnybrook Health
Sciences Centre, 2011 ONCA 482). The narrow meaning given to the term “therapeutic” by the lower court was not
endorsed by McLachlin C.J. It was a serious error on the part of the Crown, in
my view, not to refer to the final decision in this case.
[94]
Finally, I would briefly mention another
requirement regarding therapeutic health care services. It is the “all or
substantially all” test in clause D above.
[95]
The “all or substantially all” test in this part of the
legislation contains a double negative and is extremely difficult to interpret.
Fortunately, it is not necessary that I spend too much time trying to decipher
it because I am satisfied that the test is met applying the interpretation that
was adopted by both parties. The agreed upon test was that therapeutic health
care services had to be provided for at least 2.4 hours (10 percent) each
calendar day.
[96]
Although it is not necessary for my decision, I
would mention that judicial interpretations of the “all or
substantially all” test in other tax contexts, which are numerous, do not support the
bright line 10 percent test suggested by the parties. Something less than this
will suffice.
[97]
Turning to the facts of this case, The Harrison
received funding during the relevant period for 2.8 hours of care per resident
per day. Since some of the care provided at The Harrison is provided in groups
(e.g. oversight for choking risk at meals), the funding actually provides
greater than 2.8 hours of care per day per resident.
[98]
When one considers the high level of health care
that is provided generally at The Harrison, I find that this requirement is
satisfied.
VI. Conclusion
[99]
As reflected in the reasons above, I have
concluded that Elim qualifies for the rebates that it seeks. The appeal will be
allowed in full, with costs.
Signed at
Toronto, Ontario this 10th day of November 2015.
“J.M. Woods”
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