Date: 20001019
Docket: 2000-1651-IT-I
BETWEEN:
MARCEL GALIPEAU,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Beaubier, J.T.C.C.
[1] This appeal pursuant to the Informal Procedure was heard at Kelowna, British Columbia on October 6, 2000. The Appellant testified and called Michael Puttick, M.D., F.R.C.P.C., a rheumatologist, who was the Appellant's wife's (Linda) physician at all material times. He has been a physician since 1986.
[2] It is ordered that henceforth, the address of the Appellant respecting this appeal is:
280 Madsen Road
Kelowna, British Columbia
V1X 2C2
[3] Paragraphs 2 to 5 of the Reply to the Notice of Appeal read:
2. In computing income for the 1998 taxation year, the Appellant claimed the amount of $11,568.48 (the "Amount") as medical expenses relating to the installation of a hot tub.
3. In reassessing the Appellant for the 1998 taxation year, the Minister of National Revenue (the "Minister") disallowed the Amount.
4. In so reassessing the Appellant, the Minister made the following assumptions of fact:
(a) the Appellant's spouse (the "Spouse") suffers from ankylosing spondylitis and fybromyalgia;
(b) the Spouse gets symptomatic relief from the use of a hot tub;
(c) the Appellant purchased a hot tub in 1998 and sought to deduct the Amount, which was the cost of the hot tub, as medical expense;
(d) the hot tub is not equipment or a device prescribed by section 5700 of the Income Tax Regulations (the "Regulations");
(e) the Amount was not paid in respect of a medical expense as described in subsection 118.2(2) of the Income Tax Act (the "Act");
(f) the Amount was not paid for reasonable expenses relating to renovation or alterations to a dwelling to enable the Spouse to gain access to, or to be mobile and functional within, the dwelling; and
(f) the hot tub was not prescribed by a medical practitioner.
B. ISSUES TO BE DECIDED
5. The issue is whether the Appellant was entitled to deduct the Amount pursuant to section 118.2 of the Act.
[4] Assumptions 4(a), (b) and (c) are correct. Dr. Puttick identified Exhibit A-1, dated September 11, 1995, which he had written on a prescription pad on that date and stated firmly in both examination in chief and cross-examination that it was his prescription for a hot tub for Mrs. Galipeau. He also stated that he has never written the word "prescription" on any prescription and that he writes all of his prescriptions in that style. Therefore, the Court finds that the hot tub in question was prescribed by a medical practitioner.
[5] The tub was purchased for $7,068.00 on July 21, 1998 when the Galipeaus were finally able to save enough money to afford it. Thereupon, they had to pay for sufficient electric power installation, the home renovations, and installation costs of the hot tub in their home. These constitute the rest of the deduction claimed. The couple is far from well-to-do and these expenses have required sacrifices of the entire family. Their children have had to forego recreational activities such as hockey and sports in order to help their mother both physically and with expenses like these.
[6] Mrs. Galipeau cannot work even in the home. She cannot bend forward or backward. Her side to side motion is extremely limited. She takes anti-inflammatories, pain-killers and sleeping medications all as prescribed by her doctor. She suffers from severe back pain. Dr. Puttick testified that her condition is more severe than most patients with her illness and that her symptoms are much worse at night. As a result, Mr. Galipeau testified that it takes Mrs. Galipeau 45 minutes just to get out of bed and another 15 – 20 minutes to get to the bathroom unless she is assisted. She cannot sit down in the bathroom; rather she simply falls onto the toilet if she is not helped. She cannot bend down to dress herself. In the morning she has coffee and does exercises for 1 ¾ hours in the hot tub. After that she is too tired to do anything more in the morning.
[7] She can only stand for 10 to 15 minutes at a time in order to prepare a meal. She can lift her arms to shoulder height. She cannot bend. If she tries to, she cannot get up. She lays down almost all day until her seven and eleven year old sons come home from school to help her get up. She needs help to walk and to climb the stairs. Vertebrae are fused in both her neck and her back. Mrs. Galipeau's condition is permanent. In the period in question she had a severe and prolonged impairment.
[8] All of these problems have existed since 1995. As a result of these problems, Mr. Galipeau has lost as much as four months work in a year in order to care for his wife. Before they had the hot tub they went to a public facility, but with the cutbacks in medical care, they became unable to afford it.
[9] The use of the hot tub has alleviated Mrs. Galipeau's symptoms. They can move the jets in the hot tub so as to offer the most heat to various areas of her body during her exercises. She does this daily with the aid of her husband. The hot tub is not used by the children and it was purchased specifically for Mrs. Galipeau's therapy.
[10] The expenses claimed are pursuant to paragraph 118.2(2)(l.2) and (m) of the Income Tax Act. They read:
118.2(2) For the purposes of subsection (1), a medical expense of an individual is an amount paid ...
...
(l.2) for reasonable expenses relating to renovations or alterations to a dwelling of the patient who lacks normal physical development or has a severe and prolonged mobility impairment, to enable the patient to gain access to, or to be mobile or functional within, the dwelling;
...
(m) for any device or equipment for use by the patient that
(i) is of a prescribed kind,
(ii) is prescribed by a medical practitioner,
(iii) is not described in any other paragraph of this subsection, and
(iv) meets such conditions as are prescribed as to its use or the reason for its acquisition,
to the extent that the amount so paid does not exceed the amount, if any, prescribed in respect of the device or equipment;
...
[11] The hot tub was purchased to enable Mrs. Galipeau to gain access to, and to be mobile or functional within her dwelling. Insofar as that is possible, with the heat it has provided and with its jets and the exercise in the hot tub, it has succeeded in that. The expenses paid to install it were for renovation and alteration to the Galipeau dwelling to enable the hot tub to be installed so that it is useful to Mrs. Galipeau.
[12] Respondent's counsel pointed out the provisions of Regulation 5700(i), which reads:
5700 For the purposes of paragraph 118.2(2)(m) of the Act, a device or equipment is prescribed if it is a
...
(i) device that is designed to assist an individual in walking where the individual has a mobility impairment; ...
The Respondent interprets this to mean that the hot tub must be designed specifically to assist Mrs. Galipeau in walking where she has a mobility impairment. Mr. Galipeau testified that the best hot tub for Mrs. Galipeau would cost $18,000.00. This hot tub had the kind of jets and water flow that Mrs. Galipeau needed and after inspecting all of the hot tubs available, the one that they purchased was the best for her purposes that the Galipeaus could afford.
[13] Provisions such as Section 118.2 – the "medical expense credit", the disability tax credit and the child tax credit (which has replaced the former federal family allowance) appear to have been inserted by the federal government into the Income Tax Act for two reasons:
(1) To enable the federal government to participate in social welfare programmes as a part of its policy, and
(2) To alleviate the heavy income tax burden on individuals and, where provincial governments adopt the Income Tax Act, to share that alleviation with provincial governments.
Similarly, other provisions have been legislated to provide incentives for various kinds of investments or expenditures to bring about increased production, to further environmental causes, to assist cultural endeavours or to bring about changes in living standards or habitats or investments in provinces or other geographic areas such as the north.
[14] It is in light of these occurrences in the Income Tax Act that Section 118.2 and the Regulation must be examined. In Corporation Notre-Dame de Bon-Secours v. Communaute Urbaine de Quebec and City of Quebec, 95 DTC 5017, Gonthier, J. stated at the end of Section A of his analysis:
The rules formulated in the preceding pages, some of which were relied on recently in Symes v. Canada [1993] 4 S.C.R. 695, may be summarized as follows:
- The interpretation of tax legislation should follow the ordinary rules of interpretation;
- A legislative provision should be given a strict or liberal interpretation depending on the purpose underlying it, and that purpose must be identified in light of the context of the statute, its objective and the legislative intent: this is the teleological approach;
- The teleological approach will favour the taxpayer or the tax department depending solely on the legislative provision in question, and not on the existence of predetermined presumptions;
- Substance should be given precedence over form to the extent that this is consistent with the wording and objective of the statute;
- Only a reasonable doubt, not resolved by the ordinary rules of interpretation, will be settled by recourse to the residual presumption in favour of the taxpayer.
[15] The purpose of Section 118.2 and the Regulation is to assist people such as the Galipeaus. Objectively, the hot tub in question is not a piece of custom equipment designed exclusively for Mrs. Galipeau. She couldn't afford anything like that. But, looked at objectively, the hot tub in question allowed room for her to conduct her prescribed exercises and had hot water jets at locations that would assist her to ease her impediments and to walk and move. It was of a design that assisted her and while it was not customized for her and it did not have everything that Mrs. Galipeau needed, within the Galipeaus' means, it can be said that it was exactly right for her. In substance and objectively speaking, it was designed for her and to assist her.
[16] Section 118.2 and Regulation 5700(i) are not to be interpreted to hinder the Galipeaus from purchasing a device. Rather, they are intended to help them to do so.
[17] As a result, the Court finds that this hot tub is a device designed to assist Mrs. Galipeau's walking and mobility both in and out of her dwelling.
[18] The appeal is allowed.
[19] In the course of the Court proceedings in this matter Mr. Galipeau acquired the services of two accountants, a lawyer and a medical doctor. He is awarded costs in the fixed sum of $350.00 on account of legal costs and ordinary disbursements and, in addition, any taxable disbursements he was required to make for the attendance of Dr. Puttick to testify at the hearing.
Signed at Victoria, British Columbia, this 19th day of October 2000.
"D.W. Beaubier"
J.T.C.C.