Citation: 2012 TCC 115
Date: 20120405
Docket: 2011-3068(IT)I
BETWEEN:
JANINA TOKARSKI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Hershfield J.
[1] The Appellant claimed
medical expenses in respect of her 2009 taxation year. Her initial claim was
denied and a revised claim was made in the amount of $9,205 of which $2,497 was
disallowed.
[2] The amount disallowed
was incurred by the Appellant to travel to Poland for dental implant surgery and fusing
porcelain/ceramic crowns. Abdominal surgeries put her at risk of infection due
to significant dental and gum deterioration. There is no issue that the cost of
the dental services provided were medical expenses for the purpose of section
118.2 of the Income Tax Act (the “Act”). The issue in this appeal
is whether her travel costs to Poland of $2,497 also qualify as medical expenses. The
Appellant was assessed on the basis that they were not.
[3] The Appellant testified
at the hearing and I am satisfied with her evidence that the dental work she
had done in Poland involved as many as seven implants and ten porcelain/ceramic
crowns. I also accept the Appellant’s testimony that she required bone grafts
as part of the procedure for the implant placements. I also accept her
testimony as to her need to go to Poland on two occasions, namely in April and in December
2009 and to stay there each time for extended periods to complete the required
dental services.
[4] I also accept that
equivalent dental services were available locally in Victoria,
British Columbia where she lived at the time.
[5] It is on that basis that her travel costs were denied
since the Act stipulates that travel costs are only included as a
medical expense if substantially
equivalent medical services are not available within 40 kilometers of where she
dwells.
[6] The Respondent
relies on paragraph 118.2(2)(g) of the Act which reads as
follows:
118.2(2) Medical expenses -- For the
purposes of subsection 118.2(1), a medical expense of an individual is an
amount paid
…
(g) [transportation] -- to
a person engaged in the business of providing transportation services, to the
extent that the payment is made for the transportation of
(i)
the patient, and
(ii) one
individual who accompanied the patient, where the patient was, and has been
certified by a medical practitioner to be, incapable of travelling without the
assistance of an attendant
from the
locality where the patient dwells to a place, not less than 40 kilometres from
that locality, where medical services are normally provided, or from that place
to that locality, if
(iii)
substantially equivalent medical services are not available in that locality,
(iv) the route
travelled by the patient is, having regard to the circumstances, a reasonably
direct route, and
(v) the patient
travels to that place to obtain medical services for himself or herself and it
is reasonable, having regard to the circumstances, for the patient to travel to
that place to obtain those services;
[7] The Respondent asserts that since substantially equivalent
medical services were available within 40 kilometres of where she dwelled, the
Appellant’s travel cost must be denied.
[8] As well, Respondent’s
counsel pressed the point that the Appellant chose to have the dental work done
in Poland because she had family there who she stayed with and visited while having
the dental work done and that it was because of such personal considerations
that the Appellant chose to go to Poland. That is, she went to Poland, the particular location
in Poland and the particular dentist all on the basis of those personal
considerations. While the import of such emphasis was that there was a strong
personal element to the travel to Poland, I do not believe that the personal
element here is significant enough to warrant my disallowing the travel
expenses in this case on the basis of it being a personal expenditure or on the
basis that the personal considerations were the reason she went to Poland
thereby casting doubt on the Appellant’s testimony that she went specifically to
obtain the services.
[9] To the contrary, I accept that she went to Poland because the cost of getting it
done in Victoria was prohibitive. Indeed, the Reply to the Notice of Appeal (the
“Reply”) states: “… the Appellant chose to travel to Poland for the dental
implant services rather than obtain the services locally on the basis of cost;
…” That was clearly the evidence of the Appellant at the hearing and I
accept that evidence without reservation or hesitation.
[10] In fact, the
Appellant produced an estimate of what the treatment that she received in
Poland would have cost in Victoria. The estimate produced showed the cost of $14,000 for
the implant placement surgery and $14,400 for the crowns. That is, the total
cost of rehabilitating her mouth was estimated to be $28,400 if she had it done
where she lived. I might also take judicial notice that the cost of the work
done would not likely vary significantly had it been done, by dentists
specially trained to do the work, anywhere else in Canada.
[11] The actual cost for
the same services being done in Poland was $9,849.05.
Clearly then, she had good economic reasons to go to Poland for the
dental work.
[12] The problem, however, is that the requirement in the Act
at clause 118.2(2)(g)(iii) for travel costs to be included as a medical
expense is that substantially equivalent
medical services not be available in Victoria. They were – but at a price that
she testified was not one she could really afford to pay. Again, I accept her
testimony on this. Her income was a modest $13,000 in 2009 not counting her
RRSP withdrawals that were required for her to live.
[13] The issue then is whether substantially equivalent
services were “available” in the locale in which she lived – namely Victoria. The Appellant cannot succeed if the
services can be found to be “available” there, even if the cost of availing that
service was prohibitive to her.
[14] Respondent’s counsel referred me to the French version
of the subject provision which reads:
(iii) il n'est pas possible
d'obtenir dans cette localité des services médicaux sensiblement équivalents,
[15] I was referred, as well, to the
following cases:
·
Young v. R., 2009 TCC 628; and
·
Scully v.
R., 2008 TCC 617.
[16] The Respondent’s
counsel also went through the legislative history of this provision that
allowed travel costs as a medical expense. It was first added in 1973 for
travel if more than 25 miles was required to obtain the medical service. The
budget speech at that time referred to this amendment as travel to obtain
medical services “at a hospital, clinic or doctor’s office” and went on to say
“This is expected to assist people in remote or rural areas or people requiring
specialized treatment in distant centres.”
[17] Respondent’s counsel went further and referred me to
Commons Debates of April 5, 1973 and April 6, 1973. On April 5, the Honorouble
John N. Turner (Minister of Finance) stated as follows:
It is also
proposed to include as a deductible medical expense amounts paid to commercial
transport services for transportation of a taxpayer or his spouse, or
dependent, and an attendant if necessary, to and from hospital, clinic or
doctor’s office to which the individual has travelled a distance in excess of
25 miles to obtain medical services not otherwise available nearer home. I
believe that this will be of untold benefit to those living in smaller
communities across Canada where some of the specialized medical services are
not close or easily available and where Canadians go to the larger centres for
more specialized treatment.
[18] On April 6
another member of the House of Commons spoke of the amendment as follows:
We also have
the fact that all across Canada the facilities and services available to
society are fewer in the rural and lesser populated areas than they are in the
urban centres. Invariably, or almost universally across the land, if you have
an extreme or rare ailment, or even moderately rare ailment, you do not get the
medical attention that is necessary in your home town if it is a smaller sized
community. You have to travel to the larger centre to get that. In Manitoba,
the movement of people has to be towards Winnipeg, Brandon and Portage – that
part of the province – in order to get the special medical attention that may
be necessary. In British Columbia, it is to Vancouver or to Victoria on Vancouver
Island. I do not know Ontario that well, but I am quite sure that people in Northern
Ontario do not have medical facilities available to them to the extent that
they are available to people in the Toronto-Hamilton area.
Analysis
[19] In Young, Justice C. Miller denied travel
expenses from Edmonton to Calgary as the
appellant had not brought any evidence that substantially similar services were
not available in Edmonton. He found that the appellant did not
even look for options in Edmonton since the decision to go to Calgary was based on family reasons.
[20] While there are similarities to that case and the one
at bar, I am satisfied that the Appellant in the case at bar has brought all
the evidence she needed to for me to address the distinct question her case
poses - a question that was not before Justice Miller at all.
[21] Similarly in Scully, Justice Hogan found that there
was no evidence that the facility in question, a swimming facility, was not
available at a location near his home. Again, I am satisfied that the Appellant
in the case at bar has brought all the evidence she needed to for me to address
the distinct question her case poses - a question that was not before Justice Hogan
at all.
[22] Given the historical research that Respondent’s counsel
did in respect of the subject section, I pressed her to go further and look for
other authorities that might shed light on the distinct question this case
poses. She confirmed after the hearing that she could find none. Nor could I.
[23] So, it appears the distinct question before me is
without precedent. That question of course is: Can it be found that the medical
services performed for the Appellant in Poland were “available” in Victoria if the
cost of availing that service was prohibitive to her?
[24] In considering the Respondent’s argument, I make three
observations.
[25] First, in Young at paragraph 9, Justice Miller
said that it was clear that “travel expenses are to accommodate those who
cannot access medical services where they dwell”. [Emphasis added.] The
word “access” sheds little light on the question. I find it reasonable to
conclude that “access” can be denied if the cost of it is prohibitive. The same
can be said of the word “available”.
[26] Second, in the French version of the subject provision
the operative phrase is “it is not possible to obtain …” the medical services
where the taxpayer dwells. That language is equally ambiguous in terms of
answering the question before me. That is, I find it reasonable to conclude
that it is not possible to “obtain” a service that is beyond my ability to pay
for it. The same can be said of the word “available”.
[27] Third, in the House of Common debates referred to above,
it seems clear to me that what was being addressed were medical services that
are covered by provincial health care programs. Travel necessitated as a result
of the cost of the service was not in the minds of the legislators.
[28] That is to say, it is impossible to say what Parliament
intended in respect of travel expenses in a case like this except to note that
if fiscal issues were being considered, Parliament might well have wanted to
allow the travel expense in this case. If, for example, the medical expense
credit cost the government 30% of the expense, the cost to the fisc of the
Appellant having the work done in Victoria would have been $8,400. Allowing the Appellant to go to Poland and claim her travel costs would
cost the fisc less than half that amount. Two of three interested parties seem
to be winners in such case.
[29] Still, recognizing that I am satisfied that Parliament
never actually put its mind to the facts of the case at bar, I do not know what
it would have legislated had it done so.
[30] Although what the Appellant asks of me seems totally
reasonable, I cannot put myself in the shoes of Parliament. How would it have
framed the inclusion of travel costs on the basis of the affordability of a
medical service to a particular taxpayer? Would there be a reasonableness test?
Would it lead to abuse of the use of estimated costs of services? Would there
be a dollar limit on the travel amount or distance limitation or an exclusion
of travel outside Canada?
[31] Further, and most importantly, the express language of
the subject provision does not invite a subjective construction of the
circumstances of the particular taxpayer requiring the medical services. The
language “substantially equivalent
medical services are not available in that locality”, does not speak of whether
the service is available to the particular taxpayer. The circumstances of the
taxpayer seeking to claim the travel cost are not addressed in this
requirement.
[32] As well, there is already a reasonableness test in the
clause (v) of this subparagraph (g) of subsection 118.2(2):
(v) the
patient travels to that place to obtain medical services for himself or herself
and it is reasonable, having regard to the circumstances, for the patient to
travel to that place to obtain those services;
[33] This is an additional requirement to the requirement
that substantially equivalent medical
services not be available in the locality in which the taxpayer dwells. The
reasonableness of the expenditure on travel, such as in this case where the
travel was clearly reasonable, is not enough.
[34] Admittedly, there may
be a gap in the current legislation that requires Parliament to consider.
However, I am not at liberty to fill it. I would join the Appellant in asking Parliament
to consider the problem of affordability but I cannot read the current
legislation other than as the Minster of National Revenue has applied it in
this case.
[35] Accordingly, the appeal must be dismissed, without
costs.
Signed at Ottawa,
Canada this 5th day of April 2012.
"J.E. Hershfield"
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