Carole M Blais v. Minister of National Revenue, [1985] 1 CTC 2044, 85 DTC 61

Taylor, TCJ:—This is an appeal heard in Toronto, Ontario, on September 17, 1984 against income tax appeals for 1978, 1979 and 1980 in which the Minister of National Revenue disallowed a deduction claimed under paragraph 110(l)(e.2) of the Income Tax Act. The essential elements of the notice of appeal are:

During the relevant taxation years the appellant was a divorcee who supported her son Darryle, born 1/5/64 and her mother Yvonne Ferguson, born 7/4/11. In each of the taxation years the appellant claimed her son Darryle for the equivalent married exemption pursuant to paragraph 109(1)(b) of the Act.

In each of the taxation years the appellant did not claim her mother as a dependant because Mrs Ferguson’s net income, old age pension and supplement, exceeded the income limitation imposed under the Act.

Throughout each of the taxation years both Mrs Ferguson and Darryle resided in the home maintained by the appellant.

The appellant’s mother is a widow and has resided with and been dependent on the appellant for many years; since prior to her qualifying for the old age pension.

The appellant’s mother suffers from a permanent disability which originated in 1957/58 and she is confined to bed. Of a waking day she is bedridden between 14 to 16 hours.

In each of the taxation years the appellant claimed a deduction for her mother’s disability pursuant to paragraph 110(1)(e. 2).

As stated originally the Minister’s position was:

during the relevant period of time the Appellant’s mother was not necessarily confined for a substantial period of time each day to a bed or wheelchair by reason of illness, injury or affliction.

In an amended reply to notice of appeal the Minister added the following:

The Respondent relies, inter alia, on paragraphs 109(l)(b), 109(2) and 110( l)(e. 2) of the Income Tax Act, RSC 1952, chapter 148, as amended.

The Respondent submits that the Appellant was not entitled to claim a deduction under subparagraph 110(l)(e. 2) because the Appellant’s mother was not a person in respect of whom the taxpayer could claim a deduction under the subparagraph, in that:

the Appellant in her 1978, 1979 and 1980 taxation years claimed a deduction under paragraph 109( 1)(Z>) of the Act with respect to her son Darryle;

in any event, the Appellant’s mother was not, throughout any 12-month period ending in the year, necessarily confined for a substantial period of time each day to a bed or wheelchair by reason of illness, injury or affliction.

At the commencement of the hearing, the parties notified the Court that the appeal with respect to the years 1978 and 1979 would be withdrawn, and should be dismissed, and that the Minister was prepared to agree that for the year 1980 the appellant’s mother did qualify for the deduction from a strictly medical condition viewpoint. However, the Minister also asserted that the deductions still could not be claimed because of the specific restriction contained in paragraph 110(1)(e.2) of the Act. The relevant portions of that section are quoted:

110(1)(e.2) Wholly dependent child or other person blind or confined to bed or wheel chair, additional deduction. . . . the amount by which $1,000 exceeds the taxable income for the year, computed before making any deductions under paragraph (e), of any person resident in Canada at any time in the year in respect of whom the taxpayer has claimed a deduction under paragraph 109(1)(b) or (d), or could have claimed such a deduction had that person had no income in the taxation year, if the person was totally blind at any time in the year or was, throughout any 12-month period ending in the year, necessarily confined for a substantial period of time each day, by reason of illness, injury or affliction, to a bed or wheel chair, and neither the taxpayer nor the person included any amount in respect of remuneration for an attendant, or care in a nursing home, by reason of the person’s blindness, illness, injury or affliction in calculating a deduction for medical expenses under this section for the year; [Emphasis mine]

In simple terms therefore, the position of the Minister was that having claimed the son Darryle under paragraph 109(l)(b), the appellant had somehow used up, or foregone the right to the claim detailed in paragraph 110(1)(e.2) as it might apply using the mother as the dependant. Had there been no possible claim for Darryle, supra, or if for some reason the appellant had chosen not to make such a claim for Darryle, the right of this appellant to claim the mother under paragraph 109(l)(b) did not appear to be challenged by the Minister. Therefore, as I see it, at the moment before making such a claim for Darryle, the appellant’s position in this matter is correct — she “could have claimed such a deduction’’. What must be addressed is whether at the moment following the claim for Darryle, did that opportunity still exist. Simply, did the right to claim the appellant’s mother under paragraph 109(l)(b) remain? In response to that point, counsel for the Minister asserted that subsection 109(2) of the Act eliminated any such prospect. That section reads:

109.2 Limitation. For the purpose of a deduction under paragraph (1)(b), the following rules apply:

(a) no deduction may be made under that paragraph by any taxpayer in respect of more than one person;

The phraseology of that section, supra, may be a bit ambiguous, since, in this instance, there was no attempt by the taxpayer to take more than one deduction under paragraph 109(l)(b), and this perspective was discussed at the hearing. However, can it be said that the same subsection 109(2), supra, abolishes the right, implicit in the words “could have claimed”? (110(l)(e.2), supra). In my view that must be answered in the affirmative. The Income Tax Act, is replete with the requirement for taxpayers to make choices — choices which are their right to make in their own best interest. However, once having made a choice, that option is closed, and the taxation results which follow, flow from that choice. I do not visualize the Act as providing the flexibility or retroactivity which requires a choice, and then permits a benefit as if that choice had not been made. At the moment following the choice of the deduction under paragraph 109(l)(b) with respect to Darryle, the option (“could have”) no longer existed.

The appeal is dismissed.

Appeal dismissed.