[OFFICIAL ENGLISH TRANSLATION]
Date: 19980127
Dockets: 96-316(IT)I
97-2549(IT)I
BETWEEN:
BERNADETTE DESBIENS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tremblay, J.T.C.C.
Issue
[1] According to the Notices of Appeal
and the Replies to the Notices of Appeal, at issue is whether, in
filing her income tax returns for the 1995 and 1996 taxation
year, the appellant was entitled to the non-refundable income tax
credit for dependants age 18 years or older with a severe
and prolonged physical or mental impairment, taking into account
the said dependants' income.
Burden of proof
[2] The onus is on the appellant to
establish that the assessments made by the respondent are
unfounded. This onus results from a number of court decisions,
including the Supreme Court of Canada decision in Johnston v.
Minister of National Revenue.[1]
[3] In that decision, the Supreme
Court also ruled that the assumptions of fact relied on by the
respondent in making the assessments or reassessments are assumed
to be true until proven otherwise.
Appeal 97-316(IT)I
[4] In the present case, the
assumptions of fact relied on by the respondent are set out in
subparagraphs 3(a) and 3(b) of the Reply to the Notice of
Appeal. Paragraph 3 reads as follows:
[translation]
3. In making
the June 10, 1996, assessment for the 1995 taxation year, the
Minister relied on the following assumptions of fact in
particular:
(a) for the 1995
taxation year, the total income of the appellant's two
sisters, Jeannette Desbiens and Étiennette Desbiens, was
$8,026 and $7,932 respectively; [admitted]
(b) the appellant
was therefore not entitled to the non-refundable income tax
credit for dependants because, under the Income Tax Act
("the Act"), total income of the two sisters was
too high;
Appeal 97-2549(IT)I
[5] In docket number 97-2549(IT)I, the
assumptions of fact relied on by the respondent are set out in
subparagraphs 3(a) to 3(i) of the Reply to the Notice of
Appeal and they read as follows:
[translation]
3. In making
this assessment for the 1996 taxation year, the Minister relied
on the following assumptions of fact in particular:
(a) for the 1996
taxation year, the net income of each of the appellant's two
sisters, Jeannette Desbiens and Étiennette Desbiens,
exceeded $4,273;
(b) Jeannette
Desbiens and Étiennette Desbiens are not dependants of the
appellant to whom the disability amount may be transferred;
(c) on the income
tax return she filed for the 1996 taxation year, in computing her
non-refundable income tax credits, the appellant did not claim
any amount for dependants age 18 or older with an impairment;
(d) the appellant
was therefore not entitled to the non-refundable income tax
credit for dependants with an impairment because, under the
Income Tax Act ("the Act"), the total
income of the two sisters was too high;
(e) furthermore,
with respect to her two sisters, Jeannette Desbiens and
Étiennette Desbiens, the appellant filed Certificates
(form T2201A) for a Disability Tax Credit transferred from
dependants other than a spouse, which certificates were dated
September 16, 1996, and duly signed by Dr. André
Fleury ("the medical doctor");
(f) according
to form T2201, the appellant's two sisters did not meet the
eligibility criteria;
(g) the medical
doctor diagnosed that Jeannette Desbiens and Étiennette
Desbiens were not limited in performing the activities of daily
living;
(h) in a January 14,
1997, telephone conversation with the medical doctor, he
confirmed that, for each of the two sisters, the illness was
controlled by medication and the impairment was intermittent;
(i) in
accordance with the Act, the Minister therefore disallowed
the appellant the non-refundable disability tax credit
transferred from dependants other than a spouse.
[6] For the purposes of this case,
counsel for the respondent admitted in the Reply to the Notice of
Appeal that, although the assumptions of fact indicated
otherwise, the appellants' two sisters met the criteria for
persons with a severe and prolonged impairment. Counsel for the
respondent wanted to limit his arguments to these persons'
income, in accordance with section 118(1)(d) of the
Income Tax Act ("the Act").
[7] The appellant testified that the
amounts her sisters received from social assistance were barely
adequate to pay for drugs such as argatil, nozinam and other
similar drugs. The main effect of these drugs is to slow brain
cell malfunction. The side effects experienced, however, are
dilation of the pupil of the eye and allergy to sunlight. Because
of this, sunglasses and a steady supply of sunscreen must be
purchased.
[8] As well, the two sisters had
insulin-dependent diabetes, which required the purchase of a
glucose monitor, strips, lancets and insulin.
[9] The appellant argued that, the
Quebec government having reduced its drug spending, the amounts
received from social assistance constituted her sisters'
taxable income; these amounts were inadequate to pay for the
drugs.
[10] Section 118(1)(d) of the
Act applicable to the 1993 and following taxation years
reads as follows:
118(1)(d) Dependants - for each dependant of the
individual for the year who
(i) attained the age of 18 years before the end of the year,
and
(ii) was dependent on the individual because of mental or
physical infirmity,
an amount determined by the formula
$1,471 - (E - $2,500)
where
E is the greater of $2,500 and the income for the year of the
dependant.
[11] In 1995, concerning Jeannette, the
calculation is as follows:
$1,471
- ($8,026 - $2,500 = $5,526)
$1,471
- $4,055 = 0
Concerning Étiennette, the calculation is as follows:
$1,471
- ($7,932 - $2,500 = $5,432)
$1,471
- $3,961 = 0
[12] In 1996, the calculation is similar
since the income exceeds $4,273:
$1,471
- ($4,273 - $2,500 = $1,773)
$1,471
- $1,773 = 0
[13] Despite all the sympathy the Court has
for the appellant, it is obliged to apply the Act as
enacted by Parliament. The Court does not legislate; it applies
the Act.
Conclusion
[14] For the above-noted reasons, the appeal
is dismissed.
"Guy Tremblay"
J.T.C.C.
Signed at Québec, Canada, this 27th day of January
1998.
Translation certified true
on this 3rd day of June 2003.
Sophie Debbané, Revisor
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