[OFFICIAL ENGLISH
TRANSLATION]
Date:
20020821
Docket:
2001-4617(IT)I
BETWEEN:
MARC
TESSIER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Lamarre
Proulx, J.T.C.C.
[1] This
is an appeal under the informal procedure for the 2000 taxation year.
[2] The
issue is whether medical expenses of $9,465 paid by the appellant but
reimbursed by the Great‑West Life Assurance Company (group plan No. 134634)
are eligible for the medical expense credit under section 118.2 of the Income
Tax Act ("the Act").
[3] The
facts of this case are described in paragraph 7 of the Reply to the Notice
of Appeal ("the Reply") as follows:
[TRANSLATION]
(a) for the
taxation year at issue, the appellant claimed $11,669 as medical expenses
eligible for the medical expense credit;
(b) during the
taxation year at issue, the appellant was a member of a group plan that covered
medical expenses:
(i) life
insurance company Great-West
(ii) plan
number 134634
(iii) appellant's
identification number S216588863;
(c) after making
claims in accordance with the provisions of his group insurance plan
No. 134634 with the Great‑West Life Assurance Company, the appellant
was reimbursed $9,465 for the 2000 taxation year;
(d) in computing
his income for the 2000 taxation year, the appellant did not have to
include the total of $9,465 he received on his insurance claims;
(e) the
Minister's view was that the medical expenses reimbursed for the 2000 taxation
year did not entitle the appellant to a medical expense credit.
[4] In
his Notice of Appeal, the appellant argued as follows:
[TRANSLATION]
. . .
You are reducing my medical
expenses from $11,669.52 to $2,204.30, a loss of $9,465.22 that reduces
the non‑refundable tax credit by $1,609. The reason given is that I was
reimbursed under an insurance plan. Does the reimbursement change the concept
of "eligible medical expenses" for tax purposes? A medical expense is
any expense incurred pursuant to a medical order for a taxpayer.
Does payment of the expenses by a
taxpayer or by a third party change the concept? No.
. . .
Why does the Department not inquire
as to who pays the medical expenses of a person who has no insurance?
. . .
[5] The
appellant admitted all the subparagraphs of paragraph 7 of the Reply with
the exception of the last subparagraph. In argument, he submitted that the
Minister of National Revenue ("the Minister") does not ask taxpayers
to assert that they, and not third parties, are indeed the ones who have paid
their medical expenses. He also referred to the tax treatment of insurance
proceeds on depreciable property and to the right of the owner of the property
to depreciate on the basis of the new price.
[6] Counsel
for the respondent referred to the decision of Judge Teskey of this Court
in Lopes v. Canada, [1996] T.C.J. No. 1220, which involved the 1993
and 1994 taxation years. She referred to paragraphs 11‑13 of that
decision:
11. The Appellant argued that since
premiums for the insurance plans were paid with taxpayer's dollars, he should
be able to expense the medical bills in total eventhough [sic] only a
very small portion of these bills were actually paid by himself. The
fact the insurance premiums were paid with tax paid dollars is irrelevant.
12. Subsection 118.2(1) is the
provision of the Act that allows the deduction from income of medical expenses.
This provision only allows expenses "actually paid" by the
taxpayer. The operative portion reads:
(1) For
the purposes of computing the tax payable under this Part by an individual for
a taxation year, there may be deducted ...
....
A ....
B is the total of the individual's
medical expenses ... and that were paid by either the individual or the individual's
legal representative.
13. Since the Appellant is alive and
of sound mind, the insurance companies cannot be said to be his legal
representative. Thus the only portion the Appellant can use as a
deduction are those medical and drug costs that he actually paid from his own
funds and he cannot include the portion he was reimbursed for by the insurance
companies.
Conclusion
[7] The
relevant parts of subsection 118.2(1) and of paragraph 118.2(3)(b)
of the Act read as follows:
Medical expense credit
118.2(1) For
the purpose of computing the tax payable under this Part by an individual for a
taxation year, there may be deducted an amount determined by the formula
A(B - C) - D
where
A is
the appropriate percentage for the year;
B is
the total of the individual's medical expenses that are proven by filing
receipts therefor with the Minister, that were not included in determining an
amount under this subsection or subsection 122.51(2) for a preceding taxation
year and that were paid by either the individual or the individual's legal
representative,
...
Deemed medical expense
118.2(3) For the
purposes of subsection (1),
...
(b) there
shall not be included as a medical expense of an individual any expense to the
extent that
(i) the individual,
(ii) the person referred to in subsection (2) as the patient,
(iii) any person related to a person referred to in subparagraph
(i) or (ii), or
(iv) the legal representative of any person referred to in any of
subparagraphs (i) to (iii)
is entitled to be
reimbursed for the expense, except to the extent that the amount of the
reimbursement is required to be included in computing income and is not
deductible in computing taxable income.
[8] Paragraph 118.2(3)(b)
of the Act clearly states that medical expenses for which an individual
is entitled to be reimbursed are not eligible for the medical expense credit.
The right to be reimbursed for the medical expenses is sufficient in itself to
exclude them from being eligible medical expenses for the purposes of the
credit. Here, not only was the appellant entitled to be reimbursed, but he was
in fact reimbursed.
[9] The
appellant's arguments based on other legal situations cannot be accepted,
whether or not they are correct in law. The tax treatment of different legal
situations varies. What must be looked at and complied with is the legislation
that applies to the legal situation at hand. In this case, that legislation was
correctly applied by the Minister.
[10] Accordingly, the appeal is dismissed.
Signed at Ottawa, Canada, this 21st day of August 2002
J.T.C.C.
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