Date:
20020306
Docket:
2001-1494-IT-I
BETWEEN:
THE ESTATE
OF GERTRUDE BOUCHER,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Reasons
for Judgment
Angers,
J.T.C.C.
[1]
This is an appeal under the
informal procedure from an assessment concerning the 1999
taxation year of the Estate of Dame Gertrude Boucher, which
was represented at the hearing by the deceased's son,
Laurent Boisclair.
[2]
The assessment for 1999 was made by the
Minister of National Revenue (the "Minister") on
August 8, 2000. The appellant's claim for a disability
tax credit was disallowed. In the Minister's view, the
appellant was not entitled to claim both a disability tax credit
under section 118.3 of the Income Tax Act (the
"Act") and a medical expense credit in respect
of amounts paid to nursing homes under section 118.2 of the
Act.
[3]
The appellant filed a notice of objection on
October 12, 2000, and the Minister confirmed his assessment
on January 29, 2001.
[4]
The facts on which the Minister based his assessment were
admitted by the appellant at the hearing. The facts in question
are as follows:
[TRANSLATION]
(a) Gertrude Boucher is a person
who had been suffering from a severe and permanent disability
since 1990.
(b) For 1999, the appellant
claims both the disability tax credit and a medical expense
credit totalling $10,765.17.
(c) According to a document
filed by the appellant, the amount of $10,765.17 breaks down as
follows:
|
Accommodation:
|
CHSLD
René-Lévesque
|
$4,789.00
|
|
|
Résidence Les Quatre Temps
|
$3,375.00
|
|
|
|
|
|
|
Hôpital du Haut-Richelieu
|
$880.00
|
|
|
|
|
|
Medical expenses
|
|
$740.69
|
|
Private
health services plan
|
|
$570.48
|
|
premiums
|
|
|
|
Dental
care
|
|
$260.00
|
|
Miscellaneous
|
|
$150.00
|
|
|
|
|
|
|
Total
|
$10,765.17
|
[5]
The position of the appellant's agent is based on the fact
that his mother required constant supervision by health care
attendants during her stay at the residential centre as a result
of her medical condition. Since she monopolized the health care
attendants assigned to take care of her, most of the
accommodation expenses she paid were purportedly used to pay the
attendants. This led the appellant's agent to conclude that
the accommodation expenses were in fact attendant expenses. Since
the total accommodation expenses (the first three items in the
previous paragraph) were less than $10,000, the appellant should
be able to deduct the expenses under paragraph 118.2(2)(b.1) of the Act,
which reads as follows:
(2)
Medical expenses. For
the purposes of subsection (1), a medical expense of an
individual is an amount paid
. .
.
(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
amount is included under section 63 or 64 or
paragraph (b), (c), (d) or (e)
in computing a deduction claimed in respect of the patient for
the taxation year in which the remuneration was paid,
(iii) at
the time the remuneration is paid, the attendant is neither the
individual's spouse 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) . . .
.
[6]
The appellant's agent also claims that a representative of
the Minister had confirmed in a telephone conversation he had
with her that the two credits had been allowed and that a notice
of refund would be issued. That conversation purportedly took
place on November 28, 2000. On January 29, 2001, he
received the assessment in issue, which confirmed the assessment
of August 8, 2000. He further contends that a letter from
the Canada Customs and Revenue Agency (formerly "Revenue
Canada") confirmed that, if medical expenses were expenses
for a health care attendant and were less than $10,000, the
appellant could deduct both amounts. However, I wish to point out
that the same letter states that the appellant could not deduct
the disability amount if it deducted, as medical expenses, the
remuneration paid to a health care attendant in excess of $10,000
or expenses paid for accommodation in a nursing home that related
to the deceased's mental or physical impairment. The
appellant could deduct the greater of the two amounts, but not
both.
[7]
The appellant's agent argues that, in principle, if a
representative of the Minister states that a taxpayer may deduct
both amounts provided the expenses for a health care attendant
are less than $10,000, the Minister cannot subsequently change
his mind.
[8]
The appellant's agent further argues that the Minister's
representatives are confused because the Act itself is very confusing. He asked the Court to be flexible
in interpreting the acts and regulations and requested a refund
of the $100 filing fee he had paid for his appeal.
[9]
Counsel for the respondent submitted that the $9,044 in medical
expenses paid for the residential centres are in fact expenses
for accommodation at that type of centre and not expenses paid as
remuneration for health care attendants. The appellant did not
pay for a particular service but for a variety of services, which
were the responsibility of those various residential centres. The
receipts filed with the income tax return are receipts for
accommodation and they indicate nothing else.
[10] He
submitted that incorrect information provided by an official is
not binding on the Minister. Since the amount of $9,044 relates
to accommodation expenses, the Act does not
permit a taxpayer to obtain the credit for mental or physical
impairment.
[11] The
respondent called Claude Paradis, financial and technical services
director for CHSLD René-Lévesque,
as a witness. The centre offers its clients long-term health
and accommodation services. The centre takes care of room
cleaning and provides nursing care, medical and pharmaceutical
staff and occupational therapy-all the services needed by the
persons housed by the Centre.
[12] A person
receiving services from the Centre must pay the maximum provided
for by the Act,that is, $1,400 a month or less,
depending on his or her income. The actual cost varies between
$4,200 and $4,300 per month. It is difficult to allocate costs
because they are based not on services received by one individual
but on services received by all persons living in the residence.
In cross-examination, Mr. Paradis admitted that in theory,
each patient required 4.2 hours of attendant care, but he
said he did not know how many hours had been required by the
deceased. These are theoretical concepts because the number of
hours per type of care given varies from patient to patient.
Mr. Paradis completed his testimony by saying that the
Centre René Lévesque offers the services
required by each patient while taking into account budget
constraints.
[13] This
therefore leads us to the resolution of the issue raised in this
case, namely, whether both amounts are deductible.
[14] The
receipts attached to the appellant's income tax return
concerning the deceased's accommodation expenses do not
provide us with any particulars on the services rendered.
According to the receipts, the expenses were accommodation
expenses. Even though the appellant's agent stated that a
portion of the deceased's expenses had been used to pay
health care attendants, he did not adduce any evidence to show
what proportion of the expenses paid was for the attendants. The
residential centres offer a variety of services, and the
consideration paid by the patient was in exchange for those
services combined. It is therefore very difficult to determine
specifically the various types of care provided and the persons
who provide them. I cannot determine on the basis of the evidence
in its entirety what specific percentage was for the health care
attendants since the receipts indicate only
"accommodation".
[15] I subscribe
to the following comments by Judge Margeson in Miles Estate v. Canada, [1999]
T.C.J. No. 535, at paragraphs 40 and 45:
[40] In the case that was referred to, as in this case, one might
provide a portion of the money for attendant care or it might be
for a full time attendant or for other than a full time
attendant. It need not be all one or the other but where you have
a document that refers to it as "rent" and nothing in
it that suggests attendant care, it is difficult to conclude that
the amount of money that was paid was, on the face of it, paid
for anything except rent.
. . .
[45] In a case of this nature, it is incumbent upon the appellant
to establish on a balance of probabilities what the payment was
for. Therefore, there must be a breakdown in the receipt to show
what portion was for attendant care.
[16] For these
reasons, I conclude that the expenses incurred by the deceased
were paid for accommodation and not for the services of health
care attendants as her agent would like.
[17] The
provisions of the Act
concerning the credits claimed by the appellant are
paragraph 118.2(2)(b) respecting medical expenses
paid for care in a nursing home and subsection 118.3(1) for
the credit for mental or physical impairment. Without reproducing
them in full, it is clear that, in the instant case, the
appellant could, at first glance, obtain both credits, were it
not for paragraph 118.3(1)(c), which reads as
follows:
(1) Where
. . .
(c) no amount in respect of
remuneration for an attendant or care in a nursing home, in
respect of the individual, is included in calculating a deduction
under section 118.2 (otherwise than because of
paragraph 118.2(2)(b.1)) for the year by the
individual or by any other person,
for the
purposes of computing the tax payable under this Part by the
individual for the year, there may be deducted an amount
determined by the formula
A
´$4,118
where
A
is the appropriate percentage for the year.
[18] I therefore
think it is clear that the credit for mental or physical
impairment can be claimed only if amounts representing the
taxpayer's accommodation expenses at a nursing home have not
been deducted as medical expenses.
[19] I
acknowledge that, had those payments been made to a health care
attendant and had been less than $10,000, the appellant would
have been entitled to both deductions or credits. For the reasons
stated above, that is not the case here.
[20] As for the
statements made by an official of the Minister, the written
statements in Exhibit A-1, that is, a letter dated
September 22, 2000, and another dated January 23, 2001,
which concern the interpretation of the Act, are not
incorrect. It was only during a telephone conversation that a
representative of the Minister apparently said that the appellant
was entitled to both deductions. I concur with the following
remarks by Judge Rip of this Court in Beal v.
Canada, [1995] T.C.J. No. 1064, at paragraph 16, where
he states:
That the
appellant relied on the advice of the Minister of National
Revenue's ("Minister") officials in claiming the
tax credits does not assist him. The Minister cannot be bound by
advice given by his or her officials when the conditions
prescribed by the law were not met: M.N.R. v. Inland
Industries Ltd., 72 D.T.C. 6013 at 6017, per
Pigeon J.
[21] The
appellant requested a refund of his $100 filing fee. The Tax
Court of Canada Rules (Informal Procedure) address the
Court's powers regarding the filing fee. The relevant
provisions are as follows:
s. 4(6) The
Court may, on application made by an individual in the written
appeal referred to in subsection (1), waive the payment of
the filing fee where the Court is satisfied that its payment
would cause severe financial hardship to the
individual.
s. 4(7) The
Court shall decide whether to grant an application made under
subsection (6) solely on the basis of the information
contained in the written appeal referred to in
subsection (1).
[22] The written
appeal referred to in subsection 4(1) is an appeal made in
writing and sets out, in general terms, the reasons for the
appeal and the relevant facts. In light of those provisions and
the fact that there is no information in the appeal enabling me
to rule on this question, I cannot waive the appellant's
filing fee.
[23] For these
reasons, the appeal is dismissed.
Signed at
Ottawa, Canada, this 6th day of March 2002.
J.T.C.C.
Translation certified
true on this 19th day of November
2002.
Sophie Debbané,
Revisor
[OFFICIAL
ENGLISH TRANSLATION]
2001-1494(IT)I
BETWEEN:
THE ESTATE
OF GERTRUDE BOUCHER,
Appellant,
and
HER MAJESTY
THE QUEEN,
Respondent.
Appeal heard
on January 30, 2002, at Montréal, Quebec,
by
the
Honourable Judge François Angers
Appearances
Agent for
the
Appellant:
Laurent Boisclair
Counsel
for the
Respondent:
Philippe Dupuis
JUDGMENT
The appeal from the assessment made under the Income Tax
Act for the 1999 taxation year is dismissed in accordance
with the attached Reasons for Judgment.
Signed at
Ottawa, Canada, this 6th day of March 2002.
J.T.C.C.
Translation certified
true on this 19th day of November
2002.
Sophie Debbané,
Revisor
[OFFICIAL
ENGLISH TRANSLATION]
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