REASONS
FOR JUDGMENT
Boyle J.
Introduction
[1]
The Appellant, Sandra Hughes, has appealed the
determination by the Canada Revenue Agency (“CRA”) that she was not entitled to
claim a disability tax credit (“DTC”) in respect of her daughter Gwynneth.
[2]
Ms. Hughes applied for the DTC in respect
of her daughter in June 2015 using CRA’s form T2201, which included the
required certification by Gwynneth’s doctor. In September 2015, CRA issued a
notice of determination stating Gwynneth was not eligible for the DTC. The
determination of non‑eligibility was confirmed by CRA in June 2016 in
response to the notice of objection filed by Ms. Hughes.
[3]
The Appellant’s daughter was 15 years old
when the doctor signed the DTC application. The application itself was not
dated nor is there evidence of when it was filed or mailed. Had the
determination been that her daughter was eligible for the DTC, the Appellant
intended to begin claiming her as a DTC eligible dependent on her annual
returns and to apply for a reassessment of her returns for the preceding
10 years as permitted by the Income Tax Act and the policy and
practice of CRA.
[4]
The Appellant’s daughter was born with
phenylketonuria (“PKU”). PKU is a lifelong condition for which there remains no
cure, only lifelong treatment. If left untreated, a child with PKU can be
expected to suffer permanent severe brain damage.
[5]
As described by Gwynneth’s medical geneticist
and metabolic specialist in her letter of March 2017:
Phenylketonuria is an inherited impairment of the body’s
ability to metabolize the amino acid phenylalanine. This is a genetic
condition, meaning it is life long and starts at birth. This is a serious
condition, as phenylalanine metabolism is a vital function. Without the ability
to metabolize phenylalanine, the levels of phenylalanine in the body quickly
rise (within a day) to toxic levels. Short term, high phenylalanine affects
cognitive ability (executive function) and long term (in children) causes
permanent severe brain damage.
People who do
not have this impairment (i.e. do not have phenylketonuria) can metabolize
phenylalanine, therefore they do not have to follow a phenylalanine restricted
diet. People with phenylketonuria must follow the treatment plan and have blood
phenylalanine levels monitored for their entire lives. If they consume a
regular diet they will be causing brain damage to themselves.
[6]
The treatment is not to remove all phenylalanine
(“Phe”) from a PKU patient’s diet — even if that were a possibility. The human
body requires a certain amount of Phe to develop and function normally. For
healthy persons eating a normal diet, the metabolization of Phe allows the body
to use about 10% of the Phe ingested and to eliminate the other approximate
90%. For those with PKU, their body must ingest each day only the specific
lesser amount prescribed in order to develop and function normally, but absolutely
nothing more as any excess will not be eliminated and will damage the brain.
[7]
This treatment for PKU is well described in the
recent decision of Justice Jorré in Mullings v. The Queen as follows:
24 The therapy consists of managing the
daily amount of Phe consumed very precisely while also ensuring a sufficient
intake of all the other amino acids, apart from Phe, that constitute the necessary
protein intake for the child. This is accomplished by a carefully managed
combination of three components:
1. The
prescribed formula (the medical formula) that Dr. Potter described as
artificial nutrition — The formula provides a complete set of proteins except
for Phe and must be taken four times a day in the morning, at lunch time, in
the afternoon and at bedtime. The formula consists of a prescribed amount of
amino acid powder dissolved in a particular amount of water.
2. Special
processed low protein foods (the medical foods) — For example, there are pasta
products where the high protein component (such as flour) has been replaced
with a low protein substitute (such as starch); unfortunately, the result is
less palatable than normal pasta. These medical foods are quite expensive.
3. Limited
quantities of ordinary foods that have little or no Phe as well as completely
avoiding many foods that have high Phe.
[8]
It is clear from CRA’s initial determination of
September 2015, and its May 2016 and June 2016 letters responding to the
Appellant’s objection, that Gwynneth was determined to be non‑eligible
because her impairment related to a dietary restriction and her treatment
activities consisted of following a dietary regime.
The Law
[9]
The relevant portions of the DTC legislation are:
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118.3(1) Credit for mental or
physical impairment — Where
(a) an individual has one
or more severe and prolonged impairments in physical or mental functions,
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118.3(1) Crédit d’impôt pour
déficience mentale ou physique — Un montant est déductible dans le calcul
de l’impôt payable par un particulier en vertu de la présente partie pour une
année d’imposition, si les conditions suivantes sont réunies :
a) le
particulier a une ou plusieurs déficiences graves et prolongées des fonctions
physiques ou mentales;
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(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 or would be
markedly restricted but for therapy that
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a.1) les
effets de la ou des déficiences […] sont tels que la capacité du particulier
d’accomplir une activité courante de la vie quotidienne est limitée de
façon marquée ou le serait en l’absence de soins thérapeutiques qui, à la
fois :
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(i) is
essential to sustain a vital function of the individual,
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(i) sont essentiels au maintien d’une
fonction vitale du particulier,
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(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
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(ii) doivent être administrés au moins
trois fois par semaine pendant une durée totale moyenne d’au moins 14 heures
par semaine,
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(iii) cannot
reasonably be expected to be of significant benefit to persons who are not so
impaired,
. . .
there may be deducted in computing
the individual’s tax payable under this Part for the year the amount . . .
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(iii) selon ce à quoi il est raisonnable
de s’attendre, n’ont pas d’effet bénéfique sur des personnes n’ayant pas une
telle déficience;
[…]
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(1.1) Time spent on therapy —
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
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(1.1) Temps consacré aux soins
thérapeutiques — Pour l’application de l’alinéa 118.3(1)a.1),
lorsqu’il s’agit d’établir si des soins thérapeutiques sont donnés au moins
trois fois par semaine pendant une durée totale moyenne d’au moins 14 heures
par semaine, le temps consacré à donner les soins est calculé selon les critères
suivants :
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(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;
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a) n’est
compté que le temps consacré aux activités qui obligent le particulier à
interrompre ses activités courantes habituelles pour recevoir les soins;
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(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;
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b) s’il
s’agit de soins dans le cadre desquels il est nécessaire de déterminer un
dosage régulier de médicaments qui doit être ajusté quotidiennement, est
compté, sous réserve de l’alinéa d), le temps consacré aux activités
entourant directement la détermination de ce dosage;
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(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
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c) dans
le cas d’un enfant qui n’est pas en mesure d’accomplir les activités liées
aux soins en raison de son âge, est compté le temps que consacrent les
principaux fournisseurs de soins de l’enfant à accomplir ces activités pour
l’enfant ou à les surveiller;
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(d) does not include
time spent on activities related to dietary or exercise restrictions or regimes
(even if these restrictions or regimes are a factor in determining the daily
dosage of medication), travel time, medical appointments, shopping for
medication or recuperation after therapy.
. . .
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d) n’est
pas compté le temps consacré aux activités liées au respect d’un régime ou de
restrictions alimentaires ou d’un programme d’exercices (même si ce
régime, ces restrictions ou ce programme sont pris en compte dans la
détermination du dosage quotidien de médicaments), aux déplacements, aux
rendez-vous médicaux, à l’achat de médicaments ou à la récupération après les
soins.
[…]
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118.4(1) Nature of impairment
— For the purposes of subsection 6(16), sections 118.2 and 118.3 and this
subsection,
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118.4(1) Déficience grave et prolongée
— Pour l’application du paragraphe 6(16), des articles 118.2 et 118.3 et du
présent paragraphe :
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(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;
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a) une
déficience est prolongée si elle dure au moins 12 mois d’affilée ou s’il est
raisonnable de s’attendre à ce qu’elle dure au moins 12 mois d’affilée;
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(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;
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b) la
capacité d’un particulier d’accomplir une activité courante de la vie
quotidienne est limitée de façon marquée seulement si, même avec des
soins thérapeutiques et l’aide des appareils et des médicaments indiqués, il
est toujours ou presque toujours aveugle ou incapable d’accomplir une
activité courante de la vie quotidienne sans y consacrer un temps excessif;
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. . .
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[…]
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(c) a basic activity of
daily living in relation to an individual means
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c) sont
des activités courantes de la vie quotidienne pour un particulier :
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(i) mental
functions necessary for everyday life,
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(i) les fonctions mentales nécessaires
aux activités de la vie courante,
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(ii) feeding
oneself or dressing oneself,
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(ii) le fait de s’alimenter ou de
s’habiller,
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(iii) speaking
so as to be understood, in a quiet setting, by another person familiar with
the individual,
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(iii) le fait de parler de façon à se
faire comprendre, dans un endroit calme, par une personne de sa connaissance,
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(iv) hearing so
as to understand, in a quiet setting, another person familiar with the
individual,
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(iv) le fait d’entendre de façon à
comprendre, dans un endroit calme, une personne de sa connaissance,
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(v) eliminating
(bowel or bladder functions), or
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(v) les fonctions d’évacuation
intestinale ou vésicale,
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(vi) walking;
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(vi) le fait de marcher;
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(c.1) mental functions
necessary for everyday life include
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c.1) sont
compris parmi les fonctions mentales nécessaires aux activités de la vie
courante :
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(i) memory,
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(i) la mémoire,
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(ii) problem
solving, goal-setting and judgement (taken together), and
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(ii) la résolution de problèmes,
l’atteinte d’objectifs et le jugement (considérés dans leur ensemble),
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(iii) adaptive
functioning;
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(iii) l’apprentissage fonctionnel à
l’indépendance;
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. . .
(e) feeding oneself does
not include
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[…]
e) le
fait de s’alimenter ne comprend pas :
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(i) any of the
activities of identifying, finding, shopping for or otherwise procuring food,
or
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(i) les activités qui consistent à
identifier, à rechercher, à acheter ou à se procurer autrement des aliments,
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(ii) the
activity of preparing food to the extent that the time associated with
the activity would not have been necessary in the absence of a dietary
restriction or regime; and
. . .
[Emphasis added.]
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(ii) l’activité qui consiste à
préparer des aliments, dans la mesure où le temps associé à cette
activité n’y aurait pas été consacré en l’absence d’une restriction ou
d’un régime alimentaire;
[…]
[Je souligne.]
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[10]
In Johnston v. Canada, the Federal Court of Appeal
wrote:
10 The purpose of sections 118.3 and 118.4
is not to indemnify a person who suffers from a severe and prolonged mental or
physical impairment, but to financially assist him or her in bearing the
additional costs of living and working generated by the impairment. As
Bowman T.C.J. wrote in Radage v. R. at p. 2528:
The legislative intent appears to be
to provide a modest relief to persons who fall within a relatively restricted
category of markedly physically or mentally impaired persons. The intent is
neither to give the credit to everyone who suffers from a disability nor to
erect a hurdle that is impossible for virtually every disabled person to
surmount. It obviously recognizes that disabled persons need such tax relief
and it is intended to be of benefit to such persons.
The learned Judge went on to add, at p.
2529, and I agree with him:
If the object of Parliament, which is
to give to disabled persons a measure of relief that will to some degree
alleviate the increased difficulties under which their impairment forces them
to live, is to be achieved the provisions must be given a humane and compassionate
construction.
11 Indeed, although the scope of these provisions is limited in
their application to severely impaired persons, they must not be interpreted
so restrictively as to negate or compromise the legislative intent.
[Emphasis added.]
While Radage v. Canada is most often referred to in
support of the DTC provisions being construed humanely and compassionately and “not narrowly and technically”, it should be noted
that former Chief Justice Bowman in that same passage in Radage restated
his view that the DTC provisions also “require a
compassionate and commonsense application” (emphasis added).
[11]
In the CRA form T2201 in evidence, CRA defines “life‑sustaining
therapy” as follows:
Life-sustaining
therapy for your patient must meet both of the following conditions:
•
Your patient needs this therapy to support a
vital function, even if this therapy has alleviated the symptoms.
•
Your patient needs this therapy at least 3 times
per week, for an average of at least 14 hours per week.
Your patient
must dedicate the time for the therapy — that is, the patient has to take time
away from normal, everyday activities to receive it. If your patient receives
therapy by a portable device, such as an insulin pump, or an implanted device,
such as a pacemaker, the time the device takes to deliver the therapy does
not count towards the 14‑hour per week requirement. However, the time
your patient spends setting up a portable device does count.
Do not
include activities such as following a dietary
restriction or regime, exercising, travelling to receive the therapy, attending
medical appointments (other than appointments where the therapy is received),
shopping for medication, or recuperating after therapy.
For 2005 and
later years
•
If your patient’s therapy requires a regular
dosage of medication that needs to be adjusted daily, the activities directly
related to determining and administering the dosage are considered part
of the therapy (for example, monitoring blood glucose levels, preparing and
administering the insulin, calibrating necessary equipment, or maintaining a
log book of blood glucose levels).
•
Activities that are considered to be part of
following a dietary regime, such as carbohydrate calculation, as well as
activities related to exercise, do not count toward the 14‑hour
requirement (even when these activities or regimes are a factor in determining
the daily dosage of medication).
•
If a child is unable to perform the activities
related to the therapy because of his or her age, the time spent by the child’s
primary caregivers performing and supervising these activities can be
counted toward the 14‑hour per week requirement. For example, in
the case of a child with Type 1 diabetes, supervision includes having
to wake the child at night to test his or her blood glucose level, checking the
child to determine the need for additional blood glucose testing (during or
after physical activity), or other supervisory activities that can
reasonably be considered necessary to adjust the dosage of insulin
(excluding carbohydrate calculation).
Examples of
life‑sustaining therapy:
•
Chest physiotherapy to facilitate breathing
•
Kidney dialysis to filter blood
•
Insulin therapy to treat Type 1 diabetes in
a child who cannot independently adjust the insulin dosage (for 2005 and later
years)
The form T2201 also defines “markedly restricted” and “inordinate
amount of time” as follows:
Markedly
restricted — means that all or substantially all
of the time (at least 90% of the time), and even with therapy (other than
therapy to support a vital function) and the use of appropriate devices and
medication, either:
•
your patient is unable to perform one or more of
the basic activities of daily living (see above); or
•
it takes your patient an inordinate amount of
time (defined in the introduction of this form) to perform one or more of
the basic activities of daily living.
. . .
Inordinate amount of time — is a
clinical judgement made by a qualified practitioner who observes a
recognizable difference in the time required for an activity to be
performed by a patient. Usually, this equals three times the normal time
required to complete the activity.
[Emphasis added.]
Positions of the Parties
[12]
The Appellant maintains that her daughter is
eligible for the DTC on the basis that she received life‑sustaining therapy
daily which required on average 14 hours weekly of qualifying time, and
but for which she would be markedly restricted in her mental functions
necessary for everyday life.
[13]
The Appellant also maintains that her daughter
was markedly restricted in her ability to feed herself. Her daughter would be
severely brain damaged if she fed herself or was fed food available in grocery
stores or restaurants. She maintained that being fed the prescribed medical
diet to deliver only the specific amount of Phe her body needed to develop and
function normally, and for her brain not to be permanently damaged, required an
inordinate amount of time.
[14]
The Respondent’s position is that “the Appellant’s daughter’s diet is not a therapy
administered for a total duration averaging at least 14 hours a week”. The Respondent maintained that
the prescribed medical diet that delivered the specific amount of Phe along
with other nutrients required for normal development and functioning did not
constitute a therapy because it was specifically excluded as a dietary
restriction or regime.
[15]
The Respondent further maintained that the
Appellant’s daughter was not markedly restricted in her ability to feed herself
since she had “no difficulty or impairment in
physically feeding herself” and relied upon her doctor’s certification
that she had “no physical constraints to eating and
drinking”.
[16]
In addition to the notice of appeal and the
reply, both parties provided detailed written submissions to the Court
following the hearing, and provided further detailed written submissions to the
Court in August 2017 following the decision of Justice Jorré in Mullings,
above. In late September, the Respondent wrote to the Court with respect to its
further and amended position regarding the Mullings decision for
purposes of this appeal.
[17]
The Appellant testified on her own behalf. In
addition, the Court heard testimony from Nicole Pallone who described herself
as a parent‑expert on caring for PKU children. Ms. Pallone has
spoken and presented posters on the topic of managing PKU in children at
medical and scientific conferences including a PKU Academy in Rome in 2012, the
Genetic Metabolic Dietitians International Meeting in New Orleans in 2012, the
National PKU Alliance in Philadelphia in 2012, the Garrod Symposium for
Canadian Geneticists in Winnipeg in 2012, the American Society for Human
Genetics in San Francisco in 2012, and the Society for Inherited Metabolic
Diseases Symposium in California in 2014.
[18]
Ms. Pallone wrote the “PKU Fact Sheet” as
well as the “The ABC’s of PKU — What Early Childhood Educators and School
Administrators Need to Know”, both published by Canadian PKU and Allied
Disorders Inc. These publications provided helpful information to the Court. In
addition, Ms. Pallone’s testimony corroborated the Appellant’s testimony
regarding the needed activities in caring for a PKU child. The Respondent did
not claim to be surprised by this evidence, did not object to any of it, and
did not introduce evidence of its own. The Respondent was involved in the Mullings
appeal several months earlier.
[19]
The Respondent did not call any witnesses.
DTC Jurisprudence Involving PKU Children
[20]
The Court was referred to two decisions of this
Court involving DTC claims for persons afflicted with PKU.
[21]
Both parties referred to the 2017 decision of
Justice Jorré in Mullings. The Mullings case was decided in
favour of the taxpayer. The only issue before the Court in that case was
whether the therapy was administered for a total duration averaging not less
than 14 hours a week of time spent on qualifying activities. There was no dispute in Mullings
that the treatment the taxpayer’s child received for their PKU to deliver the
precise amount of Phe was therapy. Similarly, it was not disputed that without
that therapy the child’s ability with respect to a basic activity of daily living
would be markedly restricted. It appears from the reasons that the marked
restriction was considered to be with respect to the necessary mental functions
and that the vital function for which the therapy was necessary to sustain was
brain function.
[22]
In deciding the sole issue of whether the 14‑hour
weekly therapy requirements were met, Justice Jorré concluded:
1. The
administration of the precise amount of Phe every day was therapy.
2. The
administration of the treatment or therapy included:
– sourcing and
storing medical formula and medical food;
– planning and
preparing X’s meals and snacks including:
• weighing food so
as to measure, calculate, and log the amount of Phe from all sources prepared
for X’s consumption so as to ensure the correct amount of daily Phe consumption
as well as
• measuring and
logging the formula to ensure adequate consumption of all the other amino acids
(apart from Phe) constituting protein;
– supervising X’s
consumption of food so the amount of Phe actually consumed is monitored;
– if necessary,
after a meal or snack, recalculating Phe consumption for the rest of the day
and adjusting subsequent meals or snacks to take account of actual consumption
(for example, if a food is not eaten or only partly eaten with the result that
less food than planned was consumed, then it will be necessary to ensure more
Phe is consumed by adding or substituting something; another example, where
adjustments have to be made, is this: if, for instance, in spite of efforts to
avoid this, X winds up eating some other child’s food it may be necessary to
try to make an offsetting reduction in Phe consumption for the day);
– educating others,
such as caregivers, teachers, classmates and other parents, regarding PKU so as
to prevent consumption of more Phe than planned (for example, ice cream at a
friend’s home);
– when picking up X
from the care of others, finding out what medical formula and medical food and
ordinary food was consumed — normally the Appellant will pick up any leftover
meal or snack items so that they can be measured (weighed) and the amount of
Phe consumed up to that point in the day can be recalculated for the purpose of
making adjustments for the rest of the day;
– attending various
medical appointments with different doctors and the dietitian;
– monitoring X’s Phe
blood level through weekly blood tests to ensure that the prescribed Phe‑restricted
diet is effective.
and included:
1. Monitoring: blood
Phe-level check (venous draw) at McMaster Children’s Hospital (once/week)
2. Treatment: medical
formula measurement and preparation
3. Treatment:
consumption of medical formula/supervision of medical formula intake
4. Measurement and
recording of medical formula actually administered/drank
5. Measurement/weighing
of Phe content to be consumed at each and every meal or snack at daycare only
6. Calculation of Phe
in foods administered for meals or snacks at daycare only
7. Storage of food in
daycare centre and pickup at end of day
8. Discussion with
daycare staff (a.m. and p.m.) regarding consumption of food during the day,
every day
9. Daycare staff
logging food consumed daily
10. Measurement/weighing
of food actually consumed at each meal or snack at daycare
11. Measurement/weighing
of food not consumed at daycare
12. Discussion with
daycare staff re: special snacks (e.g., birthdays, pizza day) or inadvertent
consumption of Phe
13. Preparation of low
Phe alternative for daycare special snacks (e.g., birthdays, pizza day)
14. Checking labels,
determining and calculating Phe in new foods
15. Measurement/weighing
of Phe content to be consumed at each and every meal or snack at home
16. Calculation of Phe
in foods administered for meals or snacks at home
17. Measurement/weighing
of food actually consumed at each meal or snack at home
18. Preparation/cooking
for Phe-restricted diet (in addition to preparation of “normal” foods)
19. Daily Phe
consumption calculation prior to dinner to determine meal/portion permitted
20. Daily Phe
consumption post dinner to determine Phe to be added (or not) to final formula
21. Supervision of Phe
intake
22. Maintain logbook of
daily Phe intake
23. Receipt of blood
Phe level results via email
24. Consultation with
registered dietitian to adjust medical formula and/or allotted Phe intake
25. Preparation for
travel away from home (e.g., day trips, weekend visits, lengthy vacations)
26. Researching and
interviewing child care centres
27. Time off of work
for blood Phe checks (including travel)
28. Clinic follow-up
with metabolic physician, dietitian, genetic counsellor, and social worker
(three-four visits/year)
29. Ordering medical
food and medical formula
30. Unpacking,
labelling and storing medical food (perishable and non‑perishable) and
medical formula
31. Consult with
physicians and/or pharmacists re: Phe in day-to-day medicines, antibiotics, and
vaccines
32. Consult with
developmental pediatrician re: overall development and management of PKU (three
visits/year)
3. The
reference to medical appointments excluded from time spent on therapy by
paragraph 118.3(1.1)(d) does not apply to a medical appointment where
there is actual treatment or testing that is part of the treatment. That is
consistent with CRA’s form T2201 which says to exclude medical appointments
other than appointments where the therapy is received.
4. Everything
relating to the administration of the medical formula multiple times daily,
including the related blood test, is part of the administration of the therapy (Nos.
1 to 4 and 23 above).
5. Attending
to the Phe consumption in the medical food, including the time spent
determining the amount of Phe to be consumed, and that actually consumed, as
well as the time spent logging Phe intake is part of the administration of the
necessary therapy and is not considered an excluded activity relating to
dietary restrictions or regimes (Nos. 5, 6, 10, 11, 15, 16, 19, 20 and 22
above).
6. There
may have been other activities that qualified as time spent on the
administration of therapy that were not excluded, but it was not necessary to
address them once the minimum 14‑hour average had been established in the
evidence in Mullings.
[23]
The Respondent referred to this Court’s 1996 decision
in Jasinski v. Canada.
The reasons in Jasinski have a description of PKU that is consistent
with the evidence in the case before the Court and the reasons of Justice Jorré
in Mullings, albeit much less detailed. The Jasinski case is of
very limited relevance in this case for several reasons. First, it predated the
amendments to the DTC provisions which extended them to impairments which would
markedly restrict a daily living activity but for therapy. (This is addressed
in footnote 9 of Mullings.) Second, the Court in Jasinski did not
address whether the child was markedly restricted in feeding themself, focusing
instead on the fact that any impairment to mental functions remained a
possibility and had not yet occurred. A third reason is that Jasinski
predates the Federal Court of Appeal decision in Johnston, above, and
the decision of former Chief Justice Bowman in Radage, above.
Issues to be Decided
[24]
The issues to be decided are:
1. Do
the activities relating to:
(i) the
administration of the required dosage of medical formula,
(ii) the
ingestion of the required Phe in the consumption of the medical foods, and
(iii) the
ingestion of Phe via the consumption of ordinary foods with very low naturally occurring
Phe
constitute
therapy?
2. (i) But for this therapy, would Gwynneth be markedly
restricted in her mental functions necessary for everyday living (paragraph
118.3(1)(a.1))?
(ii) Is
the therapy essential to sustain one of her vital functions (subparagraph
118.3(1)(a.1)(i))?
3. Is
any of the time spent on activities described in 1(i) through (iii) above
excluded as medical appointments or as activities relating to dietary
restrictions or regimes?
4. Did
the taxpayer and her daughter spend on average at least 14 hours weekly on
administering the prescribed PKU treatment?
5. In
the alternative, if the taxpayer is not successful in any of 1 to 4 above, is
the effect of Gwynneth’s PKU that she is markedly restricted in feeding
herself? More particularly, is the phrase “feeding oneself” limited to the
ability to prepare food and to use cutlery or hands to take food from
plate to mouth and to chew and swallow it — even in a case where most
food found in an ordinary home’s cupboards or in grocery stores or in restaurants
will have severe adverse consequences to mental functioning and development?
The Facts/Evidence
[25]
Gwynneth’s PKU disorder and her liver’s
inability to properly metabolize Phe were detected at birth and her treatment
began immediately. The Appellant was told at that time, left untreated, her
daughter would most likely not develop beyond the mental faculties of a three‑year
old.
[26]
Gwynneth was assigned to a medical team at the
Metabolic Disorders Clinic of Alberta Children’s Hospital comprised of a
medical doctor having her specialty in genetics, two registered dietitians and
a nurse, along with a social worker for counselling as required.
[27]
PKU is a rare genetic disorder affecting about
one in 15,000 Canadians. It is diagnosed through the newborn screening heel
prick program administered routinely at birth.
[28]
Phe is one of the many amino acids found in most
dietary proteins. It is essential to human development and proper brain
function. For those with a PKU disorder, Phe is not able to be properly
processed by the liver resulting in toxic accumulation in the blood and brain.
[29]
Medical treatment for PKU is prescribed by the
geneticist who determines the specific daily Phe intake requirement, the exact
amount of medical formula or formulas to be consumed three to four times daily,
as well as the daily caloric intake. These are revised and replaced regularly
as a result of regular blood testing being done to identify the Phe levels in
the blood. Blood is generally taken twice weekly in babies leading to weekly
and, by 2015 in Gwynneth’s case, every two weeks. The minimum is monthly which
is where Gwynneth is at now that she is on the pharmaceutical Kuvan. This blood
work is done at the hospital not at home, as there are no home blood testing
kits or methods available yet. Blood testing has to be done more often at times
as Phe levels are affected by teething, growth spurts, sports activities,
illness, other medications, puberty, pregnancy, etc.
[30]
The daily caloric intake has to be identified as,
if the body is not ingesting enough calories, it begins to burn existing body
mass which includes proteins high in Phe causing a child’s Phe level to spike.
The missing calories are made up in the medical formula, the medical foods as
well as some low protein ordinary food.
[31]
Administration of the necessary Phe requires
weighing absolutely everything that goes into the child’s mouth and calculating
the Phe of everything that goes into the child’s mouth. Since children are not
100% cooperative in eating what they are served, this extends to weighing
leftovers and recalculating.
[32]
Gwynneth’s prescribed daily Phe amount in 2015
was in the 300 mg range. The Phe must be calculated and monitored to the
nearest milligram, meaning there is only a fraction of 1% tolerance in
achieving the prescribed amount and not anything less or anything more.
[33]
The calculation of the Phe involves taking the
weight of each particular food item serving, finding its protein content as a
function of weight for the particular item from extensive charts that are
available, and then applying a factor that reflects the amount of Phe in food
protein. Some food products and medications contain disproportionately high
Phe, such as anything that has aspartame as an ingredient, and separate charts
must be consulted for these.
All new medications require a consultation with one of the Metabolic Disorders Clinic’s
registered dietitians.
[34]
This also requires teaching others how to
protect Gwynneth’s brain — all who will be giving any food to her such as
daycare providers, school teachers, grandparents, friends, Gwynneth’s friends’
parents, and other family members.
[35]
The restricted PKU medical diet is comprised of
three distinct components:
(i) the medical formula,
(ii) the specially produced medical food,
(iii) no or low protein ordinary food items.
The Medical Formula
–
The restricted PKU diet is very low in proteins
which results in a lack of certain other minerals and nutrients. This creates
the need to supplement the diet with specialized Phe‑free amino acid
formulas, as well as the specially produced low protein medical foods below. In
Gwynneth’s case, her prescription was for a mix of two dry formulas to be mixed
with water and administered three or four times throughout each day. (For some
children, it is prescribed to be mixed with a small amount of cow’s milk, in
which case it will also be a source of Phe.)
–
These are dispensed only with a prescription. The
cost of these medical formulas is covered by all provinces’ health plans.
The Medical Food
–
Medical food consists of specially produced food
items in which there is either very little protein, or from which most of the
proteins have been removed (protein‑depleted). It is distributed
completely outside the normal food distribution chain through a few Canadian
distributors. It is fully funded in all Canadian provinces once approved by
prescription from a metabolic disorders clinic. In Gwynneth’s case, her doctor
states they are supplied by the Alberta Health Services’ Inherited Metabolic
Diseases Program. For both Ms. Pallone in British Columbia, and the
Appellant in Alberta, the hospital unit informed the National Food Distribution
Centre’s Metabolic Nutrition Program in Quebec that their children qualified to
order the food directly and the province made payment directly to the
distributor. In the Mullings case, the distribution centre for Ontario was
Toronto’s Sick Children’s Hospital.
–
The medical food is regulated in Canada and
comes with prominent warnings that it is to be used only under medical
supervision. These warnings included phrases such as:
•
“For use solely
under medical supervision in the dietary management of conditions which require
control or restriction of protein intake.”,
•
“[This product] has been
specially developed as a medical food for the dietary management of conditions
requiring restriction or control of protein. Use only under medical
supervision.”, and
•
“IMPORTANT WARNING: The
product must be consumed as part of an integrated dietary plan approved by a
physician and must not be used as unique source of nutrition.”.
–
These medical foods are used only in preparing
food for the PKU patient. They include items described as pastas, rice, wafers,
burger mix, hot dog mix, imitation scrambled egg, imitation macaroni and
cheese, crackers, baking mix, cereals, and various bread products as well as “Dari-Free” milk. They often require significantly
more cooking time than regular foods.
–
The medical foods are used to deliver Phe in
small amounts as required for the PKU patient, combined with other necessary
nutritional ingredients.
–
It is clear from the approval email from one of
Gwynneth’s registered dietitians at the hospital that the approval
“prescriptions” are only for certain of the available foods and in quantities
dictated by Gwynneth’s condition and changes to it.
No or Low Protein Ordinary Foods
–
There are some foods which are naturally very
low in proteins. These are used to deliver Phe to the PKU patient while being
able to provide a better balanced nutritional diet overall. Even with these “ordinary foods”, the Phe level has to be identified and
logged, etc. as part of Gwynneth’s daily Phe intake in ensuring she receives
precisely the prescribed Phe amount. These ordinary foods are able to be
prepared for other family members’ meals at the same time and enjoyed by other
family members. However, all ingredients require careful and precise measure,
and Gwynneth’s servings need to be isolated, weighed, measured, converted and
logged, etc.
[36]
The Appellant described life since Gwynneth was
diagnosed as a baby as weigh, measure, convert, eat, repeat, each bite, every
single thing, all day, each day.
[37]
The last meal of each day, bedtime snack, is
when the balance of the necessary daily Phe is administered. It is administered
as food, not liquid.
[38]
All of the administration of the dietary
treatment was performed by the Appellant until Gwynneth was 10. At age 10, the
Appellant began involving Gwynneth with managing her PKU diet treatment on a
supervised basis. It was only after Gwynneth turned 15, i.e. after the years in
question, that Gwynneth was able to manage her PKU without supervision. This
means that between the ages of 10 and 15, both the PKU child and the parent
were involved in the administration of the treatment.
[39]
Since 2015, Gwynneth has been on Kuvan which is
a pharmaceutical that contains the missing enzyme BH4 that is
normally responsible for metabolizing Phe into tyrosine in the body. This has somewhat
reduced the time needed to administer the prescribed treatment as it has
allowed Gwynneth to eat slightly more ordinary low‑Phe foods since she
can tolerate somewhat more Phe. The mix of medical food to ordinary food over
the years has ranged from 90 medical:10 ordinary when she was younger, to 60:40
at age 15, to 40:60 now that she is now on Kuvan.
Average Weekly Time Estimates
[40]
The Appellant prepared a one‑page chart
estimating the time spent on the treatment and management of Gwynneth’s PKU. It
is a one‑page point form description of 19 activities together with an
estimate of the total weekly time in minutes spent on each on average.
[41]
The Appellant described this in her evidence,
was cross‑examined on it and answered my questions seeking clarification
on it. It remains at best an estimate. It therefore has a number of limitations
which were identified in Court.
[42]
The one limitation stated on the form itself is
that these estimates do not include the additional time and activity required
when Gwynneth has any form of sickness. The time spent to manage her therapy
increases when she is ill as more frequent blood work and heightened vigilance
overall are required. This includes significant illnesses as well as sickness
that are able to be readily treated with over‑the‑counter
medications.
[43]
Most significantly perhaps, this was prepared in
the months leading up to the trial to reflect the state of affairs when
Gwynneth was about 14 to 15 around the time the application was made. It was evident
in the testimony that a number of these activities required significantly more
time in prior years when Gwynneth was younger. I do not believe a proper
determination should be made by limiting the review to the particular year the
request for a determination is made — when Gwynneth turned 15 — given that the
determination will apply to the 10 prior years also — when Gwynneth was as
young as 5.
[44]
In addition, the evidence was clear that between
the ages of 10 and 15 both Gwynneth and the taxpayer were involved in the
administration of her PKU treatment as it was necessary for the taxpayer to
begin ensuring her child would be able to manage her PKU treatment on her own
as she grew into adulthood. This would understandably be a lengthy process.
Since both were involved, her estimate would need to be significantly higher at
the start of this process, reducing gradually over this five‑year period.
This is not reflected in the estimates.
[45]
There are a number of activities identified in
the list Justice Jorré accepted in Mullings, which consistent with the
evidence in this case must have been undertaken and form a part of Gwynneth’s
treatment, but do not appear to be reflected in the one‑page chart.
[46]
As described in greater detail below, in two
instances on this chart, arithmetic errors were made in converting annual
estimates to hours per week.
[47]
As described below, not all time spent on
activities related to the administration of the treatment will qualify, given
the exclusions in the DTC legislation.
[48]
The line for blood work indicates the amount is
15 minutes weekly on the basis that the blood work was once a month. It is
clear from the evidence that blood work only commenced being completed once a
month after Gwynneth started on Kuvan which was after the application was made.
Before that time, it was twice monthly as described above, and had earlier been
weekly. I find that a proper time estimate to have been entered on this chart
should have reflected at least twice monthly and therefore at least
30 minutes per week.
[49]
The Respondent’s concerns with the activities
and the time estimates in the chart are set out in paragraphs 18 to 22 of the
Respondent’s Further Written Submissions of August 17, 2017 (and
reconfirmed in the Respondent’s letter to the Court of September 25,
2017). These read as follows:
The Appellant does not meet the 14‑hour
minimum in any event
18. Even
if this court applies Justice Jorré’s reasoning in Mullings, the
Appellant has not demonstrated that she meets the 14‑hour minimum
threshold.
19. The
Time Chart states the Appellant spends an average of 15.79 hours per week
managing her daughter’s PKU. In cross‑examination, the Appellant conceded
that the Time Chart overestimated time related to several activities.
20. The
Appellant allocated 90 minutes per week to time allocated to “preparation
for travel away from home (e.g. weekend trips, student work exchange in
Montreal, lengthy vacations)” and 60 minutes per week to “educating
caregivers (e.g. host family and YWCA during work exchange in Montreal)”. On
cross‑examination, she conceded that these activities would take place
only a few times a year, rather than on a weekly basis. These activities must
be removed from the Appellant’s estimated average time per week spent on
therapy.
21. The
Time Chart also included 30 minutes per week for “travel time to go to
courier deport to pick up medical foods and medication”. Paragraph 118.3(1.1)(d)
excludes travel time from being counted toward the 14‑hour minimum. This
activity cannot be considered in determining the weekly average time.
22. When these
activities are removed, the average time per week spent on therapy for the
Appellant’s daughter is 12.78 hours (767 minutes). As such, the Appellant
does not meet the 14‑hour weekly minimum average required for entitlement
to the DTC.
[50]
The Respondent is correct that the
30 minutes of travel time weekly to pick medical foods and medication from
the courier depot cannot be counted by virtue of paragraph 118.3(1.1)(d).
[51]
The Respondent is correct in identifying that
the 90 minutes and 60 minutes weekly time allocated to educating
caregivers and preparation for travel away from home were miscalculated,
clearly inadvertently, by the Appellant in pulling together the one‑page
chart. However, the evidence is very clear that the Court worked through this
with her and the correct numbers should not be zero as suggested by the
Respondent, but should be reduced to 10 minutes and 6 minutes based
upon her clear and direct answers to the questions once the problem was
identified.
[52]
The corrected chart to reflect no travel time to
pick up medical foods and medication, and the proper numbers for preparation
for travel and educating caregivers, as well as blood work, would be
798.5 minutes or 13.3 hours.
[53]
I find that the evidence would reasonably support
an increase in the 5% to 10% range to reflect the limitations I have described
above other than the miscalculations now corrected for. That clearly places the
qualifying time spent on administration of Gwynneth’s PKU therapy during the
relevant period exceeding 14 hours weekly on average.
[54]
In the context of the DTC limitation describing “a total duration averaging not less than 14 hours a
week” for all of the activities relating to the administration of
medically prescribed therapy, however complicated or complex that may be in a
particular situation, is contextually very different statutory language of
measurement than, say, the “distance between the old
residence and the new work location is not less than 40 kilometres greater
than the distance between the new residence and the new work location”.
The latter moving expense language describes a finite readily measurable
particular distance. In contrast, in the context of lifelong, ongoing treatment
which varies with illnesses, growth spurts, other medications, etc. that is
required to be satisfied annually at tax time using a weekly average for
activities that must occupy at least one‑twelfth of the year to qualify (the
equivalent of a month’s worth of activity, or approximately two months of the
year’s daylight hours), the concept of significant digits needs to be
approached differently to reflect that differing context. If something must be
at least 40 kilometres between point A and point B, clearly 39.75 will not
suffice. In contrast, where the average of what is described in the DTC
legislation with respect to life‑sustaining therapy, where it would be
entirely unreasonable to expect persons to keep time logs of their actual activities
on a daily basis for accurate and precise measurement, I would be inclined to
think that the concept of significant digits for measuring total average hours
is solely whole numbers. On that basis, even without a 5% to 10% increase I have
found warranted in this case, I would be inclined to think that anything
13.5 hours or greater estimated with the inherent limitations that the
statute clearly contemplates, should satisfy the 14‑hour requirement.
[55]
Another example where greater precision could be
expected is with respect to travel and meal expenses for employees where the
limitation is expressed as the taxpayer be “required by
the taxpayer’s duties to be away, for a period of not less twelve hours,
from the municipality”. Here again, the measured item, being a period of
not less than 12 hours, is clearly to be calculated with respect to each
meal claimed and is therefore to be looked at on a daily basis in which case
there would be a single period of time to be measured. This would also require
a greater degree of accuracy and rigidity in deciding if the requirement was
met given that the time the individual was away from his or her municipality on
a particular day is either greater than 12 hours or it is not. Obviously,
in administering the Income Tax Act, CRA is free to recognize that daily
calculations for each work day over the course of a year covered in a
particular return may not in practice require such exactitude.
[56]
The Court in this case, however, is focusing on
the language used in the statute and is interpreting textually, contextually
and purposively the 14‑hour average weekly requirement for someone who
has an impairment that is required to be prolonged, which is defined as lasting
for a continuous period of at least 12 months, and which gives rise to an
ongoing and continuous marked restriction in performing basic activities of daily
living or mental functions necessary for everyday life.
Answers and Conclusions
1. Therapy/Soins thérapeutiques
[57]
I conclude that the proper meaning of the word
“therapy” (soins thérapeutiques) in the DTC provisions,
read within the context of that provision in the DTC provisions, and in a
manner consistent with the purpose of the DTC provisions which has already been
determined by the courts, simply means the care or treatment of a physical or
mental condition. That is consistent with dictionary definitions of the term,
its use in common parlance including when talking about medical matters, and
best achieves the purpose of the amendments to the DTC provisions which
introduced the “but for therapy” extension to the scope of persons eligible to
claim it. It is also consistent with the decision of Justice Jorré in Mullings.
The Respondent did not put forward any substantive argument that this was not
an appropriate definition or application.
[58]
I agree with Justice Jorré’s more detailed
conclusions regarding the scope of qualifying activities in the case of the
administration of therapy for a PKU child in Mullings. (I also agree
with his conclusions on what does not qualify discussed below under heading 3.)
[59]
This is also consistent with CRA’s published
pronouncements and illustrative examples of the scope of the term “therapy” (soins
thérapeutiques).
2. Marked
Restriction in Mental Functions/Essential to Sustain a Vital Function
[60]
It is clear on the evidence that absent this
therapy Gwynneth would have potentially devastating and irreversible adverse
consequences to her proper mental development and functioning. Clearly the
brain and its mental functions are vital and its normal functioning is
sustained by this therapy.
3. Excluding
Dietary Restrictions or Regimes and Travel Time
[61]
None of Gwynneth’s treatment related to what can
fairly be described as simply a dietary restriction, much less a dietary regime
or anywhere close to carbohydrate reduction or calculation. I agree with the
reasons of Justice Jorré in Mullings that, in the case of administering
the necessary treatment of a PKU child with a PKU impairment as extensive as
Gwynneth’s and the Mullings child, the overall counting and managing of Phe
consumption through both medical foods and ordinary foods is much more like administering
a medication than it is like managing a diet. I agree that this should extend
to the time spent determining the amount of Phe to be consumed, determining the
amount of Phe actually consumed, and logging the Phe intake.
[62]
Travel time is clearly an excluded activity even
though a necessary part of the therapy. Travel time has been removed in
computing the average weekly time spent on qualifying activities above for
Gwynneth’s PKU treatment.
4. The 14‑hour
Average Weekly Requirement
[63]
For the reasons described above, I have found on
the evidence in this case that the 14‑hour average requirement was met for
the years up to the year the DTC eligibility application was made (2015).
[64]
This conclusion does not necessarily remain
unchanged in the future. This may depend on the continuing success of Kuvan or
other pharmaceuticals in treating Gwynneth’s disorder. It may depend upon
changes in her overall health or the scope of her PKU disorder. It may also be
that as a capable and experienced adult she is able to more efficiently
administer the treatment herself.
[65]
The 14‑hour requirement is particular to
each taxpayer and will not necessarily be met by each person afflicted with PKU
even as a child. The evidence was clear that PKU disorder is not an all‑or‑nothing
inability to process Phe but that different people have different levels of
inability to process Phe. This requirement will continue to have to be met on a
case‑by‑case basis.
5. Marked Restriction in Feeding
Herself
[66]
I do not need to decide this last question in
this case. However, in circumstances such as Gwynneth’s PKU disorder, I would
be very much inclined to think that feeding Gwynneth in her particular
circumstances required an inordinate amount of time.
[67]
The DTC provision contemplates a person whose impairment
may markedly restrict their ability to feed themself by requiring an inordinate
amount of time to do so. There is no clear or apparent reason to think that
this should be limited to impairment of the arms, jaw, or mouth, or related
motor skills. An impairment that limits what the person is capable of
processing as nutrition to fuel the body without causing severe and permanent
bodily damage might well also be considered in giving a humane, compassionate
and commonsense interpretation and application of this DTC provision.
[68]
The appeal is allowed.
Signed at Ottawa, Canada, this 27th day of February 2018.
“Patrick Boyle”
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