Date: 19971222
Docket: 97-108(IT)I
BETWEEN:
JAMES D. SMITH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Christie A.C.J.T.C.
[1] This appeal is governed by the
informal procedure provided for under section 18 and following
sections of the Tax Court of Canada Act. The year under
review is 1994.
[2] In computing his tax payable for
that year the appellant claimed in the computation of his
non-refundable tax credits the sum of $4,233.00 in unused tax
credits for medical impairment transferred to him from his spouse
Lori Smith. The Notice of Appeal reads:
"As previously stressed to Revenue Canada, Sudbury Taxation
Centre, my appeal is based on the discrimination of my spouse's
disability in accordance to the Disability Tax Credit Criteria
Guidelines, not with whether or not she meets the Guidelines
already in place.
The Disability Tax Credit Guidelines do not indicate any upper
appendage limitations in order to qualify for disability tax
credit. Why is being able to reach, lift with arms or hands,
grasp with hands, pull with arms or hands, or any upper appendage
movement, not as important as speaking or hearing?
As instructed by Revenue Canada I went through all the
preliminary channels from being ignored at my M.P.'s office to
being politically consoled by Ministers in charge with still
nothing being resolved.
My spouses disability is genuine as indicated by a sample of
some medical documents attached. Unfortunately Revenue Canada
does not think that this disability is important enough to be
included in their criteria. I strongly disagree. My basic
activities of daily living would be greatly reduced if my
arms and hands did not function properly.
I do not feel my request for the disability tax credit has
been fairly considered. I respectfully request that allowance for
the disability tax credit be reconsidered. Also the criteria
guidelines be changed to include upper body limitations.
As noted by rehabilitation professionals, Wellness Works and
Associative Rehabilitation Inc. this disability does affect basic
living activities."
[3] The opening paragraph and
paragraphs numbered 1 to 8 of the Reply to the Notice of Appeal
read:
"In reply to the Notice of Appeal for the 1994 taxation year,
filed on January 14, 1997, the Deputy Attorney General says:
A. Statement of
Facts
1. He says
that the statements in the Notice of Appeal are made principally
by way of argument and does not admit any allegations of fact
incidentally contained therein.
2. He says
that the documents attached to the Notice of Appeal speak for
themselves.
3. The
Minister of National Revenue (the 'Minister') initially assessed
the Appellant's income tax return for the 1994 taxation year by
Notice of Assessment dated March 6, 1995.
4. In
computing his tax payable for the 1994 taxation year, the
Appellant claimed in the computation of his non-refundable tax
credits, the amount of $4,233.00 for the unused credit for mental
or physical impairment transferred from his spouse.
5. By Notice
of Reassessment dated November 27, 1995, the Minister reassessed
the Appellant's income tax return for the 1994 taxation year and
disallowed the said unused credit for mental or physical
impairment transferred from his spouse referred to in
paragraph 4 above.
6. The
Appellant served on the Minister a Notice of Objection dated
January 10, 1996 with respect tot he 1994 taxation year.
7. By
Notification of Confirmation dated October 16, 1996, the Minister
confirmed that the reassessment, not to allow the unused credit
for mental or physical impairment transferred from his spouse
with respect to the 1994 taxation year, was made in accordance
with the provisions of the Income Tax Act (the
'Act').
8. In so
confirming the reassessment of the Appellant's income tax return
for the 1994 taxation year, the Minister made the following
assumptions of fact:
(a) the Appellant's
spouse suffered a fractured neck in a multi-vehicle accident in
August 1991 and subsequently developed a right Thoracic Outlet
Syndrome which needed surgical correction in February 1995;
(b) the Disability
Tax Credit Certificate, as prepared and signed by the Appellant's
spouse physician and dated August 30, 1995, fail to certify that
the Appellant's spouse has a severe and prolonged mental or
physical impairment the effects of which are such that the
Appellant's spouse ability to perform a basic activity of daily
living is markedly restricted, all or almost all the time, even
with the use of appropriate aids, devices, medication, or
therapy;
(c) the Appellant's
spouse was not suffering from a severe and prolonged mental or
physical impairment, which markedly restricted her ability to
perform a basic activity of daily living during the 1994 taxation
year; and
(d) the Appellant's
spouse was not entitled to the credit for a mental or physical
impairment pursuant to subsection 118.3(1) of the Act
during the 1994 taxation year and hence no unused credit was
available to be transferred to the Appellant from his spouse for
the purposes of computing his non-refundable tax credits and tax
payable for 1994 taxation year."
Subsection 118.3(1) of the Income Tax Act ("the
Act") provides:
"Where
(a) an
individual has a severe and prolonged mental or physical
impairment,
(a.1) the effects of the
impairment are such that the individual's ability to perform
a basic activity of daily living is markedly restricted,
(a.2) a medical doctor, or where
the impairment is an impairment of sight, a medical doctor or an
optometrist, has certified in prescribed form that the individual
has a severe and prolonged mental or physical impairment the
effects of which are such that the individual's ability to
perform a basic activity of daily living is markedly
restricted,
(b) the
individual has filed for a taxation year with the Minister the
certificate described in paragraph (a.2), and
(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 x $4,118
where
A is the appropriate percentage for the year."
Subsection 118.4(1) provides:
"For the purposes of subsection 6(16), sections 118.2 and
118.3 and this subsection,
(a) an
impairment is prolonged where it has lasted, or can reasonably be
expected to last, for a continuous period of at least
12 months;
(b) an
individual's ability to perform a basic activity of daily
living is markedly restricted only where all or substantially all
of the time, even with therapy and the use of appropriate devices
and medication, the individual is blind or is unable (or requires
an inordinate amount of time) to perform a basic activity of
daily living;
(c) a basic
activity of daily living in relation to an individual means
(i) perceiving,
thinking and remembering,
(ii) feeding and
dressing oneself,
(iii) speaking so as to be
understood, in a quiet setting, by another person familiar with
the individual,
(iv) hearing so as to
understand, in a quiet setting, another person familiar with the
individual,
(v) eliminating (bowel
or bladder functions), or
(vi) walking; and
(d) for greater
certainty, no other activity, including working, housekeeping or
a social or recreational activity, shall be considered as a basic
activity of daily living."
It will be seen that under paragraph 118.3(1)(a.2) that
a medical doctor must certify that an individual has a severe and
prolonged mental or physical impairment the effects of which are
such that the individual's ability to perform a basic activity of
daily living is markedly restricted. Under paragraph
118.3(1)(b) such a certificate must be filed with the
Minister of National Revenue.
[4] The only certificate filed with
the Minister that pertains to these proceedings is in evidence as
Exhibit R-1. It reads:
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Patient:
Social insurance number
Lori
Smith
XXX-XXX-XXX
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When the basic activity of
daily
The patient will be restricted in a basic activity of daily
living:
living became restricted:
08-1991
Permanently
Year Please give
the year the restriction
Temporarily/indefinitely ceased or should
be re-evaluated.
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Indicate medical diagnosis relevant tot he impairment
and describe aids used:
Patient had a MVA accident in Aug. 91 - # Neck. Numerous
surgeries etc. She is left with a Chronic
Pain Syndrome & Post-Traumatic Stress Disorder. She
is on constant analgesic. She also has Bilateral Thoracic
Outlet Syndrome.
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Complete the boxes that apply.
Yes
No
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Vision
Is your patient able to see, using corrective lenses if
necessary?
(visual acuity of 20/200 or better in either eye, and 20
degrees or
more visual field in the best eye, after
correction) CNIB #
_________
X
|
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Walking
Is your patient able to walk, using an aid if
necessary?
(For example, at least 50 metres on level
ground.)
X
|
|
Speaking
Is your patient able to speak so as to be understood in
a quiet
setting, using an aid if
necessary?
X
|
|
Mental functions
Is your patient able to think, perceive, and remember,
using medication
or therapy if necessary? (For example, can manage
personal affairs or do
personal care without
supervision.)
X
|
|
Hearing
Is your patient able to hear so as to understand a
spoken conversation in
a quiet setting, using an aid if necessary &
(Exclude language
differences.)
X
|
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Feeding & dressing
a) Is your patient able to feed
himself/herself, using an aid if
necessary?
X
b) Is your patient able to dress
himself/herself, using an aid if
necessary?
X
|
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Elimination
Is your patient able to control and personally manage
bowel and bladder functions,
using an aid if
necessary?
X
(For example, has uncomplicated ostomy or uses a
catheter.)
Has the impairment lasted, or is it expected to last,
for a continuous period
of at least 12
months?
X
Yes
No
Is the impairment severe enough to restrict the basic
activity of daily living
identified above, all or almost all the time, even with
the use of appropriate
aids, devices, medication, or
therapy?
X
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Having read this form, I certify that to the best of my
knowledge the foregoing information is
true and complete.
Signature of doctor or
optometrist
Date
Telephone Number
"Ronald
Sears"
Aug.
30/95
705-324-9111
86 Angeline St. S., Lindsay, Ontario K9V 6C5
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The answer to the question about dressing and the answer to
the last question are emphasized. This certificate is of no
assistance to the appellant in respect of this appeal. Indeed it
has the opposite effect.
[5] In Cusson v. M.N.R., [1993]
1 C.T.C. 2471 the headnote reads:
"The appellant claimed a tax credit pursuant to section 118.3.
She had had a mastectomy which she claimed caused her much
discomfort. The physician's certificate which the appellant filed
certified the existence of a prolonged but minor impairment. At
issue was whether the appellant had suffered a severe and
prolonged physical impairment within the meaning of subsections
118.3(1) and 118.4(1).
Held:
A certificate by a medical doctor stating that the individual
is suffering from a severe impairment was essential. The medical
doctor only certified the existence of a minor impairment. That
was insufficient. Appeal dismissed."
Lamarre Proulx, T.C.J. said at page 2472:
"A certificate by a medical doctor stating that the individual
is suffering from a severe impairment is essential to the
application of these provisions, i.e. subsections 118.3(1) and
118.4(1)"
[6] The foregoing is sufficient of
itself to dispose of this appeal in favour of the respondent.
[7] I might add that at the hearing
the appellant alleged that the legislation was in an unspecified
manner discriminatory in relation to him and he spoke of his
unsuccessful attempts through representations of a political
nature to have it changed. This, however, cannot bear on the
proper interpretation to be placed on the legislation by this
Court.
[8] A letter dated May 23, 1996 signed
by R.S.R. Sears, M.D. and addressed to Revenue Canada was placed
in evidence by the appellant. It reads:
"Re: James D. Smith, Account
Number XXX XXX XXX
60 Victoria Dr. RR 2
Cameron, OntarioK0M 1G0
I have been asked by Jim Smith to write to you with respect to
assisting you in determining eligibility for Jim Smith's spouse,
Laurie Smith for disability tax credit.
Laurie suffered a fractured neck in a multi vehicle accident on
August, 1991. She subsequently developed a right Thoracic Outlet
Syndrome which needed surgical correction on February 1, 1995.
She is left with chronic pain and disability in her upper back,
shoulders, both arms, more-so in her right arm. Because of this,
it takes her longer to dress herself. When the husband or
daughter are at home, they assist her with dressing.
In your letter to Mr. Smith dated May 6, 1996, you used the term
'excessive amount of time'. I'm not sure how you would define
excessive, but Laurie certainly spends alot longer dressing than
the average person.
I hope that this is the information you require. If I can be of
any further assistance, please feel free to call on me."
Under subparagraph 118.4(c)(ii) of the Act a
basic activity of daily living in relation to an individual means
of feeding and dressing oneself. Even if this were to be read
disjunctively Dr. Sears' letter would not establish the
appellant's entitlement to the tax credits in issue. It has been
said with reference to paragraphs 118.3(1) and 118.4(1) "that in
order for a taxpayer to qualify for a disability tax credit he
must meet rigorous requirements. Parliament intended the
deduction to be available only to individuals who suffer from the
most extreme disabling conditions": Luxton v. The Queen,
[1996] T.C.J. No. 848.
[9] The appeal is dismissed.
Signed at Ottawa, Canada, this 22nd day of December 1997.
A.C.J.T.C.C.
COURT FILE
NO.:
97-108(IT)I
STYLE OF
CAUSE:
James D. Smith v.
Her Majesty the Queen
PLACE OF
HEARING:
Belleville, Ontario
DATE OF
HEARING:
December 10, 1997
REASONS FOR JUDGMENT BY: Christie,
A.C.J.T.C.C.
DATE OF
JUDGMENT:
December 22, 1997
APPEARANCES:
For the
Appellant:
The appellant himself
Counsel for the Respondent: Dona
Gilbertson
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent:
George Thomson
Deputy Attorney General of Canada
Ottawa, Canada
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