16 November 1995 Income Tax Severed Letter 9529036 - Meaning of “readily available”

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

PRINCIPAL ISSUES:

meaning of “readily available” in 118.2(4)

POSITION:

reasonable interpretation to “readily available” must be applied. Where there is urgency to a situation and a person engaged in the business of providing transportation services cannot be located quickly or is only available after an unacceptable delay of time, it is also reasonable to accept that the service is not “readily available”. Convenience is not a factor.

REASONS:

November 16, 1995

Client Assistance Directorate HEADQUARTERS Correspondence Division Sandra Short Moira Mahoney (613) 957-8953

952903

XXXXXXXXXX
Medical Expense Tax Credit

This is in reply to your referral of November 3 concerning the above client's request to allow travel expenses for purposes of the medical expense tax credit. You have asked that we specifically address the client's most recent request that he be allowed to claim 30¢ per kilometre for trips he made to take his wife from XXXXXXXXXX to Ottawa for medical treatment which is not available locally. We understand that the distances in question exceed 40 kilometres but are less than 80 kilometres. The Memo to File which was appended to the information forwarded by you indicates that the client originally based his travel expense amount on comparable commercial rates (that is, what it would have cost his wife to travel by taxi to Ottawa).

Paragraph 118.2(2)(g) of the Act permits as a qualifying medical expense an amount paid to a person engaged in the business of providing transportation services to the extent that the amount relates to transporting a patient between the locality where the patient lives and a location which is at least 40 kilometres away in order for the patient to receive medical services at that location. Other criteria must be met as discussed in subparagraphs 118.2(2)(g)(iii) through (v). No amount has been paid to a person engaged in the business of providing transportation services in this case; thus, it is necessary, for a claim to be permitted for a purpose described in paragraph 118.2(2)(g), for the conditions of subsection 118.2(4) to be met. We note that no amount is allowable for the purposes of paragraph 118.2(2)(h) as the patient lives less than 80 kilometres from the place where she received the medical services and no amount is allowable for the purposes of paragraph 118.2(2)(f) as the patient did not travel by ambulance.

Subsection 118.2(4) of the Act provides that where “a person engaged in the business of providing transportation services is not readily available, an individual makes use of a vehicle for a purpose described in paragraph (2)(g), the individual or the individual's legal representative shall be deemed to have paid to a person engaged in the business of providing transportation services, in respect of the operation of the vehicle, such amount as is reasonable in the circumstances”.

In our view, where the conditions of subsections 118.2(4) have been met, an amount of 30¢ per kilometre for automobile travel could be considered reasonable. We assume that the client wishes to claim a flat “expense” of 30¢ per kilometre rather than any actual expenses which may have been incurred such as fuel costs. However, whether the conditions of subsection 118.2(4) have otherwise been met in the case at hand has yet to be determined. The client's submissions have not demonstrated that a person in the business of providing transportation services was not readily available to transport his wife to Ottawa. He has stated that public transportation is not generally readily available other than by way of taxi. Does this mean that transportation by cab was readily available but that his wife or he and his wife chose not to use this method of transportation or that such transportation was not “readily available”?

The conditions of subsection 118.2(4) are not met where no amount is paid to a person engaged in the business of providing transportation services because it is more convenient to the patient to use another mode of transportation. The requisite condition is that a vehicle is used because a person engaged in the business of providing transportation services is not readily available. This requirement must be respected and cannot be ignored; however, a reasonable interpretation to the phrase “readily available” must be applied in the circumstances. In our view, where there is some urgency to a situation such that immediate or at least prompt transportation to the location providing the requisite medical service is necessary and a person engaged in the business of providing transportation services cannot be located quickly or is only available after an unacceptable delay of time, then in our view it is reasonable to accept that the service is not “readily available”. Under most circumstances we would presume that a person engaged in the business of providing transportation services would be available for the purpose of transporting a client to regular, pre-scheduled medical appointments.

Unfortunately, we have insufficient information to apply these guidelines to your situation. We would not accept an argument that it was simply more convenient for the client to drive his wife to Ottawa each time. His request to allow a per kilometre amount for automobile travel should only be allowed if he can demonstrate that a person engaged in the business of providing transportation services was not “readily available”.

Bryan W. Dath
Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch