Citation: 2009TCC375
Date: 20090721
Docket: 2008-2279(IT)I
BETWEEN:
FRED HUTCHINGS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Beaubier, D.J.
[1]
This appeal pursuant to
the Informal Procedure was heard at Prince Rupert,
British Columbia on July 20, 2009. The Appellant testified and called Tiffany
Hutchings. The Respondent called Dr. Michael Ikari, Tiffany’s physician since
2000.
[2]
The particulars in
appeal are set out in paragraphs 10 to 22 inclusive of the Reply. They read:
10. On November 23, 2007, the Minister received an application for
an extension of time within which the Appellant may object to the 2005 taxation
year.
11. By letter dated January 29, 2008, the Minister advised the
Appellant that his application for an extension of time to object to the 2005
taxation year was granted.
12. On May 28, 2008, the Minister confirmed the assessment of the
Appellant’s 2005 and 2006 taxation years. Accordingly, a Notification of
Confirmation was issued to the Appellant.
13. In computing the Appellant’s non-refundable tax credits for the
2005 and 2006 taxation years, the Minister made the following assumptions of
fact:
a) the Appellant is Tiffany’s father;
b) Tiffany was born on August 18, 1983;
c) Tiffany resides with the Appellant;
d) Tiffany has Type 1 diabetes;
e) Tiffany’s medical condition did not cause her to
be markedly restricted in her basic activities of daily living in 2005 and
2006;
f) at all material times, Tiffany was able to see,
speak, hear, walk, eliminate, feed, dress and function mentally without
requiring an inordinate amount of time to do so; and
g) at all material times, Tiffany did not require
life-sustaining therapy to be administered at least three times each week for a
total duration averaging not less than fourteen hours a week.
B. OTHER MATERIAL FACTS
14. For the 2005 taxation year, Tiffany reported total income of
$19,595.05, comprised of employment earnings totalling $18,888.82 and other
income of $706.23.
15. Tiffany’s taxable income in the 2005 taxation year was
$18,784.53.
16. For the 2006 taxation year 2006, Tiffany reported total income
of $13,365.65 derived entirely from employment earnings.
17. Tiffany’s taxable income in the 2006 taxation year was
$12,865.65.
18. Tiffany claimed federal non-refundable tax credits for the 2005
and 2006 taxation years, as follows:
|
|
2005
|
2006
|
|
Basic personal amount
|
$ 8,648.00
|
$8,839.00
|
|
CPP contributions
|
730.13
|
431.58
|
|
EI premiums
|
363.78
|
249.94
|
|
Canada employment credit
|
|
250.00
|
|
Medical expenses
|
99.22
|
1,466.00
|
|
Federal non-refundable tax
credits
|
$ 9,841.13
|
$11,236.52
|
C. ISSUE TO BE DECIDED
19. The issue is whether the Appellant is entitled to claim a
transfer of a disability tax credit in respect of Tiffany for the 2005 and 2006
taxation years.
D. STATUTORY PROVISIONS RELIED ON
20. He relies on sections 118.3, 118.4 and 252 of the Income Tax
Act, R.S.C. 1985, c.1 (5th Supp.), as amended (the “Act”).
E. GROUNDS RELIED ON AND RELIEF SOUGHT
21. He submits that the Minister properly assessed the Appellant’s
2005 and 2006 taxation years not to allow a transfer of a disability tax credit
in respect of Tiffany, pursuant to sections 118.3 and 118.4 of the Act,
because:
a)
Tiffany was not markedly restricted in her basic
activities of daily living in regard to vision, walking, speaking, mental
functions, hearing, feeding, dressing or elimination; and
b)
Tiffany did not require life-sustaining therapy
to be administered at least three times each week for a total duration
averaging not less than fourteen hours a week.
22. In the alternative, if it is determined that Tiffany qualifies
for a disability tax credit, which he does not admit but expressly denies, he
submits that the amount transferable to the Appellant for the 2005 taxation
year is nil because Tiffany’s taxable income was $18,784.53.
[3]
All of the assumptions
in paragraph 13 of the Reply are correct. In essence the appeal came down to
subparagraph 13(g) of the Reply.
[4]
On February 9, 2007 Dr.
Ikari had completed Exhibit R-2 in which he stated that the administration of
insulin to Tiffany required 2 hours per week and the adjustment of the dosage
to Tiffany required another 2 hours per week in 2005 and 2006. Dr. Ikari quite
honestly stated on the stand that these were “guestimates.” He also testified
that the average young woman would require about 1 hour per day to perform
these tasks.
[5]
Fred Hutchings, the
Appellant, testified that the administration and dosage required 14 hours per
week and that he, a retired firefighter and “first responder” trained medical
aid fireman, did a great deal of this for Tiffany because she finds
administering needles frightening.
[6]
Tiffany testified that
in 2005 and 2006 the administration and adjustment of the dosage on average
required 1 hour per day. Occasionally they could require 2 hours per day or
more because she fluctuates in her need.
[7]
Subparagraph 118.3(1)(a.1)
and subsection 118.3(1.1) read as follows:
118.3 (1) Where
(a) an individual has one or more severe and prolonged
impairments in physical or mental functions,
(a.1) the effects of the impairment or impairments are such
that the individual’s ability to perform more than one basic activity of daily
living is significantly restricted where the cumulative effect of those
restrictions is equivalent to having a marked restriction in the ability to
perform a basic activity of daily living or are such that the individual’s
ability to perform a basic activity of daily living is markedly restricted or
would be markedly restricted but for therapy that
(i)
is essential to sustain a vital function of the individual,
(ii)
is required to be administered at least three times each week for a total
duration averaging not less than 14 hours a week, and
(iii)
cannot reasonably be expected to be of significant benefit to persons who are
not so impaired,
…
Time spent on therapy
(1.1) For the purpose of paragraph 118.3(1)(a.1), in determining whether therapy is required to be
administered at least three times each week for a total duration averaging not
less than an average of 14 hours a week, the time spent on administering
therapy
(a) includes only time spent on activities that require the
individual to take time away from normal everyday activities in order to
receive the therapy;
(b) in the case of therapy that requires a regular dosage
of medication that is required to be adjusted on a daily basis, includes
(subject to paragraph (d)) time spent on activities
that are directly related to the determination of the dosage of the medication;
(c) in the case of a child who is unable to perform the
activities related to the administration of the therapy as a result of the
child’s age, includes the time, if any, spent by the child’s primary caregivers
performing or supervising those activities for the child; and
(d) does not include time spent on activities related to
dietary or exercise restrictions or regimes (even if those restrictions or
regimes are a factor in determining the daily dosage of medication), travel
time, medical appointments, shopping for medication or recuperation after therapy.
[8]
Thus, the infirm person
who is not a child must be the person who spends the time spent on activities
that are directly related to the determination of the dosage of the medication
for a duration averaging not less than 14 hours a week.
[9]
Tiffany is the sufferer
of Type I diabetes who best knows the amount of time she spent in 2005 and
2006. She was completely credible and her evidence is accepted. On that basis,
her average time spent was 7 hours per week for administration of the dosage
and adjusting the dosage. It did not take 14 hours per week on average.
[10]
For this reason, the
appeal is dismissed.
Signed at
Vancouver, British Columbia,
this 21st day of July 2009.
“D.W. Beaubier”
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