Date:
20021007
Docket:
2002-1444-IT-I
BETWEEN:
RONALD M.
SROGEN,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Reasons
for Judgment
Bowie
J.
[1]
Mr. Srogen lives in a senior citizens' home called Gilmore
Gardens in Richmond B.C. He went to live there on June 1, 2000.
He pays $2,480 per month to live there, so in the year 2000 he
paid a total of $17,360. In filing his income tax return for the
year, he took the position that he was entitled to deduct that
amount as a medical expense under section 118.2 of the Income
Tax Act (the Act). The Minister did not agree with
him, and so in assessing he disallowed the deduction. Mr. Srogen
now appeals from his assessment. When he got to Court he took a
different position; he now claims that he is entitled to deduct
32% of the amount that he paid, or $5,555.20. That is because the
annual payroll of Gilmore Gardens amounts to 32% of its gross
revenues for the year. As I understood his argument, it was that
32% of his payments go to pay for attendant care, and so that
portion should be deductible under section 118.2 of the
Act.
[2]
Subsection 118.2(2) has many paragraphs, all
making provision for deductions from income in relation to
medical expenses. The following are the ones that might
conceivably have some application in a case of this
sort.
118.2(2)For the
purposes of subsection 118.2(1), a medical expense of an
individual is an amount paid
(a)
...
(b) as
remuneration for one full-time attendant (other than a person
who, at the time the remuneration is paid, is the
individual's spouse or common-law partner or is under 18
years of age) on, or for the full-time care in a nursing home of,
the patient in respect of whom an amount would, but for paragraph
118.3(1)(c), be deductible under section 118.3 in
computing a taxpayer's tax payable under this Part for the
taxation year in which the expense was incurred;
(b.1) as
remuneration for attendant care provided in Canada to the patient
if
(i)
the patient is a person in respect of whom an amount may be
deducted under section 118.3 in computing a taxpayer's tax
payable under this Part for the taxation year in which the
expense was incurred,
(ii)
no part of the remuneration is included in computing a deduction
claimed in respect of the patient under section 63 or 64 or
paragraphs (b), (b.2), (c), (d) or
(e) for any taxation year,
(iii)
at the time the remuneration is paid, the attendant is neither
the individual's spouse or common-law partner nor under 18
years of age, and
(iv)
each receipt filed with the Minister to prove payment of the
remuneration was issued by the payee and contains, where the
payee is an individual, that individual's Social Insurance
Number,
to the extent that
the total of amounts so paid does not exceed $10,000 (or $20,000
if the individual dies in the year);
(b.2) as
remuneration for the patient's care or supervision provided
in a group home in Canada maintained and operated exclusively for
the benefit of individuals who have a severe and prolonged
impairment, if
(i)
because of the patient's impairment, the patient is a person
in respect of whom an amount may be deducted under section 118.3
in computing a taxpayer's tax payable under this Part for the
taxation year in which the expense is incurred,
(ii)
no part of the remuneration is included in computing a deduction
claimed in respect of the patient under section 63 or 64 or
paragraphs (b), (b.1), (c), (d) or
(e) for any taxation year, and
(iii)
each receipt filed with the Minister to prove payment of the
remuneration was issued by the payee and contains, where the
payee is an individual, that individual's Social Insurance
Number;
(c)
as remuneration for one full-time attendant on the patient in a
self-contained domestic establishment in which the patient lives,
if
(i)
the patient is, and has been certified by a medical practitioner
to be, a person who, by reason of mental or physical infirmity,
is and is likely to be for a long-continued period of indefinite
duration dependent on others for the patient's personal needs
and care and who, as a result thereof, requires a full-time
attendant,
(ii)
at the time the remuneration is paid, the attendant is neither
the individual's spouse or common-law partner nor under 18
years of age, and
(iii)
each receipt filed with the Minister to prove payment of the
remuneration was issued by the payee and contains, where the
payee is an individual, that individual's Social Insurance
Number;
(d)
for the full-time care in a nursing home of
the patient, who has been certified by a medical practitioner to
be a person who, by reason of lack of normal mental capacity, is
and in the foreseeable future will continue to be dependent on
others for the patient's personal needs and care;
(e)
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;
(f)
...
[3]
Mr. Srogen is 80 years old, and he is not in
the best of health. As the result of spinal stenosis, he has such
difficulty walking that counsel for the Respondent conceded at
the hearing before me that he is entitled to receive the
disability tax credit under section 118.3 of the Act for
the year 2000. He also has diabetes, which is treated with
insulin and careful control of his diet. He and the chef
collaborate to ensure that his meals are suitable. He has high
blood pressure, for which he takes medication, and he has
suffered from depression since the death of his wife. However, he
is able to get around with the use of a walker, he drives a car,
and he is able to live and care for himself relatively
independently. He visits his family physician from time to time
at his office.
[4]
Gilmore Gardens was described by Ms. Oke, the
manager of the facility, as an independent seniors' residence
which offers assisted living, or supported living, to its
residents. All the residents are elderly, but they are generally,
like Mr. Srogen, able to look after most of their daily
living requirements for themselves. Gilmore Gardens offers suites
of varying sizes and a staff to assist the residents by providing
such services as meal preparation, transportation for shopping
and to doctors' offices for those who need it, housekeeping and
cleaning. Dinner is provided in a dining room each night, but
residents may have it delivered on a tray if they are ill. Lunch
is a less formal affair, to which the residents help themselves,
but the food is prepared in the kitchen by the staff. Mr. Srogen
gets his own breakfast in his suite.
[5]
Mr. Srogen's suite has two bedrooms, a living
room, a bathroom and a small kitchen. Laundry facilities are
available to him nearby. He has panic buttons in his suite, and
there are others in the hallways and common areas of the
building. Many residents choose to have a panic alarm that they
wear at all times. If one of these is pressed there is always at
least one staff member whose duty it is to respond to the alarm
immediately. All staff members are trained in first aid and CPR.
The assistant manager is a nurse, although that was not so in
2000. Mr. Srogen generally monitors his own blood pressure, but
the nurse would do it for him if he wished. There is a
hairdressing salon on the premises, and a small store where the
residents can purchase some basic foodstuff and other supplies. A
wellness clinic operates on a weekly basis, with guest speakers
addressing the residents on topics related to health and seniors'
issues. In short, Gilmore Gardens is a fairly typical seniors'
residence, but it is not a nursing home and it does not provide
treatment of any sort to the residents. The staff members provide
assistance to residents in a variety of ways, but none of them
are dedicated to providing assistance to one resident. Some of
the residents do require and have daycare services, but they
contract for that separately with other providers. Mr. Srogen
does not have any such daycare service.
[6]
I am unable to agree with the Appellant's
contention that 32% of the amount he pays to Gilmore Gardens each
year is deductible under section 118.2 of the Act.
Paragraph 118.2(2)(b) provides for the deduction of
remuneration for a full-time attendant, or for full-time care in
a nursing home. Mr. Srogen does not have a full-time
attendant, and Gilmore Gardens is not a nursing home.
[7]
Paragraph 118.2(2)(b.1) provides
a deduction for an amount paid as remuneration for attendant care
provided to a patient. It apparently does not require that the
attendant be a full-time one, but I think it is obvious from the
context that the attendant must be dedicated on at least a
part-time basis to the taxpayer for this paragraph to be
applicable. In any event, Mr. Srogen is not a patient of Gilmore
Gardens. Nor does his contract with Gilmore Gardens make any
provision to pay an amount for attendant care.
[8]
Paragraph 118.2(2)(b.2) provides
a deduction for remuneration paid for care or supervision of a
patient in a group home operated exclusively for the benefit of
individuals who have a severe and prolonged impairment. Although
Mr. Srogen has a severe and prolonged impairment, Gilmore Gardens
cannot be said to be operated exclusively for people who have
such impairments.
[9]
Paragraph 118.2(2)(c) provides a
deduction for remuneration paid for a full-time attendant.
Mr. Srogen has no full-time attendant.
[10]
Paragraph 118.2(2)(d) provides a
deduction for full-time care in a nursing home. Gilmore Gardens
is not a nursing home, and so it does not qualify.
[11]
Paragraph 118.2(2)(e) provides a
deduction for amounts paid for care, or care and training, at a
school, institution or other place of a patient if a qualified
person has certified that by reason of a physical or mental
handicap they require the "equipment, facilities or personnel
specially provided" there for their care or care and training.
Mr. Srogen obtained a letter from Alan A. Macdonald M.D. which
became Exhibit A-2 at the hearing of his appeal. The pertinent
paragraph of that letter reads as follows:
Mr. Srogen is
diabetic (NIDDM), hypertensive, and suffers from spinal stenosis
which requires the use of a walker or canes to get about. He has
also suffered from reactive depression since the death of his
wife, and so requires the environment and services of a place
like Gilmore Gardens for physical and emotional support. I would
judge the monthly fees he pays there to be a justifiable medical
expense.
[12]
The Federal Court of Appeal dealt with a
similar certification in The Queen v. Title Estate. The relevant part of
the doctor's certificate in that case read:
This
person requires a supervised setting since January 31, 1995 due
to medical illness.
This
person requires a 24-hour companion.
The Court held that
this certificate was inadequate, both because it failed to
specify the handicap from which the patient was suffering, and
also because it did not specify the equipment, facilities or
personnel that the patient required in order to obtain the care
or training needed to deal with that handicap. Dr. Macdonald's
certificate does specify Mr. Srogen's ailments, but his statement
that Mr. Srogen "requires the environment and services of a place
like Gilmore Gardens for physical and emotional support" is
similarly lacking in particulars of the equipment, facilities or
personnel required for Mr. Srogen's care or training, and so does
not satisfy the requirements of paragraph 118.2(2)(e). I
make no finding as to whether Gilmore Gardens would qualify as a
"school, institution or other place" as that expression is used
in paragraph 118.2(2)(e).
[13]
The appeal would be dismissed, but for the
concession made by counsel for the Respondent at the hearing that
I should allow the appeal to permit the Appellant to receive the
disability tax credit under section 118.3. Instead, it is allowed
and the assessment is referred back to the Minister for
reconsideration and reassessment on the basis that the Appellant
is entitled to the disability tax credit under
section 118.3, but is not entitled to any deduction for
amounts paid to Gilmore Gardens.
Signed at
Ottawa, Canada, this 7th day of October, 2002.
J.T.C.C.
COURT FILE
NO.:
2002-1444(IT)I
STYLE OF
CAUSE:
Ronald M. Srogen and
Her Majesty the Queen
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
September 26 and 27, 2002
REASONS FOR
JUDGMENT BY: The Honourable Judge E.A.
Bowie
DATE OF
JUDGMENT:
October 7, 2002
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for
the
Respondent:
Johanna Russell
COUNSEL OF
RECORD:
For the
Appellant:
Name:
N/A
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2002-1444(IT)I
BETWEEN:
RONALD M.
SROGEN,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Appeal heard
on September 26 and 27, 2002, at Vancouver, British Columbia,
by
the
Honourable Judge E.A. Bowie
Appearances
For the
Appellant:
The Appellant himself
Counsel for
the
Respondent:
Johanna Russell
JUDGMENT
Upon concession made by the Respondent, the appeal from the
assessment of tax made under the Income Tax Act for
the 2000 taxation year is allowed and the assessment is referred
back to the Minister of National Revenue for reconsideration and
reassessment on the basis that the Appellant is entitled to a
disability tax credit under section 118.3 of the Act, but
is not entitled to any deduction for amounts paid to Gilmore
Gardens.
Signed at
Ottawa, Canada, this 7th day of October, 2002.
J.T.C.C.
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