McGonegal v. R., [1997] 2 CTC 2646

Mogan T.C J.:

This is an appeal with respect to 1993 taxation year in which the Appellant has elected the informal procedure. The only issue before the court is whether the Appellant is entitled to a disability tax credit with respect to his son, Curtis, who was born in February 1989.

At birth, Curtis appeared to be a normal, healthy baby but when he was about 30 months old, in the summer of 1991, he was diagnosed as having diabetes. He was seriously ill that summer and was admitted to the Children’s Hospital of Eastern Ontario for a week in order to stabilize his condition. While he was in the hospital, his parents had to learn how to deal with diabetes and, in particular, that meant testing for his blood sugar and giving him injections of insulin. After coming out of the hospital, Curtis lived at home with his parents and they took on this extra care-giving function. He had to be tested for blood sugar three or four times a day and once during the night and he had to receive injections of insulin once or twice each day.

The Appellant’s wife testified as the prime care-giver and described how Curtis might have a hyper-active condition if he had high blood sugar or he could be lethargic if he had low blood sugar. When the time came to send him to school, the parents decided that he should have home schooling because they could not expect a teacher in a classroom filled with children to be alert for the various symptoms that Curtis might disclose, indicating that he might need some kind of treatment.

The Appellant and his wife had a second son, Ryan, born in November 1991. Because of their experience with their first son Curtis, they were more alert to Ryan’s health, and when he was a little over 2 years old, it was determined that he also had diabetes. Ryan turned five last November and shows many of the same symptoms that his older brother Curtis showed. That is to say, he would have mood swings when his blood sugar level was low but Ryan also has the additional health problem of asthma, which produces significant breathing problems. The medication for the asthma, Prednisone, elevates the blood sugar level and could cause a diabetes attack. Although both of these children are serious diabetics, it is only in respect of Curtis that the disability tax credit was claimed for 1993. In particular, Ryan’s diabetic condition was not detected until the end of 1993.

Taxpayers are permitted to claim a disability tax credit under the provisions of subsection 118.3(1) of the Income Tax Act, which states:

118.3(1) Where

(a) an individual has a severe and prolonged mental or physical impairment,

(a.l) the effects of the impairment are such that the individual’s ability to perform a basic activity of daily living is markedly restricted,

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...

The formula is omitted here because it is not relevant. Section 118.3 is quoted because it is the permissive provision which grants to a taxpayer the right to deduct a disability tax credit if the conditions are satisfied. The Respondent admits that the Appellant satisfies the conditions in subsection 118.3(1), except for paragraph (a.1). Specifically, the Respondent does not admit that Curtis suffered from a physical impairment such that his ability to perform a basic activity of daily living was markedly restricted.

Section 118.4 is important because it defines many of the terms used in Section 118.3. The relevant provisions of subsection 118.4(1) are as follows:

118.4(1) 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 may 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; ...

With regard to paragraph 118.4(l)(a), there is no question that a physical impairment caused by diabetes is prolonged in the sense that it will last for a period of more than 12 months. The Appellant’s son, who has diabetes, has a condition that will be with him for the rest of his life.

Turning to paragraph 118.4(l)(c), there are six functions identified as basic activities daily living. As I listened to the evidence of the Appellant’s wife, Lisa McGonegal, and listened to the statements made in argument, I concluded that Curtis can perform all of those basic activities of daily living. He has the normal ability to perceive, think and remember for a child his age. He could feed and dress himself in 1993 as a four year old. He could speak so as to be understood in communicating with his parents and he had no hearing difficulty in understanding what his parents would say to him. He had normal bowel and bladder functions, subject to the fact that he was required to consume a lot of liquid and may at times have had problems controlling his urine in the middle of the night. According to his mother, both Curtis and Ryan are capable of being toilet-trained. Finally, there is no doubt that both of these children are able to walk like other children. Indeed, at one point in her evidence, Lisa McGonegal referred to Curtis as a “typical four year old” in 1993.

If Curtis can perform the basic activities of daily living set out in paragraph 118.4(l)(c) then it is difficult to see how anyone could say under paragraph (b) that his ability to perform a basic activity of daily living was markedly restricted. It appears that, with appropriate medication and monitoring his blood sugar levels, Curtis will be able to lead a relatively normal life with respect to all basic activities of daily living as enumerated in the Statute.

One of the problems of appeals like this is the fact that the primary caregiver or parent will look upon the degree of care that a small diabetic child requires and regard that care, which is really a parental burden, as an indication that the child is not able to perform a basic activity of daily living. There is no question that children like Curtis and Ryan are children who require an intense amount of care from their parents but, thankfully, that required care does not mean that they cannot perform basic activities of daily living and, with care, live a relatively normal life.

On the plain language of the statute alone, as reviewed above, I would dismiss this appeal. I am reinforced, however, by the fact that three other Judges in this Court have reviewed this same legislation with respect to diabetic children and reached precisely the same conclusion that the children would not qualify for the disability tax credit simply because they had Type 1 diabetes, which means that the body does not produce insulin. I refer to the decisions in Sincock v. R., (1995), 95 D.T.C. 535 (T.C.C.), in which McArthur J. dismissed the taxpayer’s appeal; the decision in Sanders v. R., (1995), [1996] 1 C.T.C. 2617 (T.C.C.), in which Bonner J. dismissed the taxpayer’s appeal; and the decision in Oliver v. R., [1996] 3 C.T.C. 2271 (T.C.C.) in which Sobier J. dismissed the taxpayer’s appeal. I could also refer to my own decision in Koski v. The Queen decided on July 18, 1996 (not reported), in which I reviewed and recited passages from the decisions in Sincock, Sanders and Oliver. As stated, my decision to dismiss this appeal on the plain meaning of the words of the statute is reinforced by the decisions of my colleagues in the three cases just referred to.

There is a fourth case, Mantle v. R., [1995] 1 C.T.C. 2918 (T.C.C.), in which Kempo J. allowed an appeal involving a diabetic child. I am satisfied, however, that the Mantle case is what I would call a “stand alone” case running against the tide and not followed by the three decisions I rely on. In particular, both Bonner J. in Sanders and Sobier J. in Oliver went out of their way to refer to the Mantle case and state why they were not prepared to follow the that case. The appeal is dismissed.

Appeal dismissed