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Docket: 2005-226(IT)I |
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BETWEEN: |
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FRANK RASLER, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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Appeal heard on July 22, 2005 at Winnipeg, Manitoba
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Before: The Honourable Justice L.M. Little |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Julien Bédard |
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JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 2003 taxation year is dismissed, without costs, in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 29th day of July 2005.
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"L.M. Little" |
Little J.
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Citation: 2005TCC472 |
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Date: 20050729 |
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Docket:2005-226(IT)I |
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BETWEEN: |
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FRANK RASLER, |
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Appellant, |
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And |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
Little J.
A. FACTS:
[1] The Appellant was diagnosed with throat cancer in 2001.
[2] The Appellant testified that after the medical diagnosis he received chemotherapy, radiation and surgery.
[3] Because of the Appellant's medical problems he is required to take medication prescribed by a Physician.
[4] In the 2003 taxation year the Appellant claimed and was allowed eligible medical expenses in the amount of $1,824.00.
[5] In addition to the medical expenses that were claimed and allowed by the Minister of National Revenue (the "Minister") the Appellant was also advised by his Surgeon that he should purchase certain "over-the-counter" medications. The Appellant testified that he followed his Surgeon's advice and purchased various medications which are available at a drug store. However, a prescription is not required to purchase the medications.
[6] The Appellant said that he pays approximately $100.00 per month to purchase these medications.
[7] The Appellant said that in the 2003 taxation year he deducted the amount of $906.00 for the "over-the-counter" medications that he purchased.
[8] The Minister disallowed the claim that the 'over-the-counter' " medications were medical expenses.
[9] The Appellant submitted a letter from his Surgeon, Dr. Paul Kerr, M.D., F.R.C.S.C. (Exhibit A-1):
This gentleman underwent radical radiotherapy for a cancer of the throat in 2001. He suffers from severe xerostomia as a result of the treatment. He has been instructed to use over-the-counter agents to relieve this symptom. These products include Biotene Mouthwash, Biotene Gum, Oral Balance Mouth Rise (sic), Mouth Kote, and Moi-Stir.
As these products are a medical necessity for this patient, we hope that these expenses will qualify for a deductible medical expense.
B. ISSUE:
[10] In determining income for the 2003 taxation year is the Appellant allowed to deduct any amount for medical expenses pursuant to section 118.2 of the Income Tax Act in excess of the amount of $1,824.00 which was allowed by the Minister?
C. ANALYSIS:
[11] The leading Court decision on medical expenses is The Queen v. Ray, 2004 DTC 6029 (F.C.A.). In that case the taxpayer had deducted as a medical expense tax credit, $6,555.00 for physician prescribed vitamins, herbs, organic and natural foods, and bottled water. The Minister disallowed this claim on the basis that these expenses did not constitute "medical expenses" under subsection 118.2(2) of the Act. In allowing the taxpayer's appeal (2004 DTC 2120), the Tax Court of Canada concluded as follows:
(a) paragraph 118.2(2)(n) of the Act defines medical expenses to include amounts paid for "drugs, medicaments or other preparations or substances ... for use in the diagnosis, treatment or prevention of a disease ... purchased for use by the patient as prescribed by a medical practitioner or dentist, and as recorded by a pharmacist";
(b) the substances in issue were medications falling under subsection 118.2(2) of the Act;
(c) the substances were prescribed by a doctor, but were purchased outside of a pharmacy, and so were not recorded by a pharmacist. The Judge of the Tax Court held that the recording by a pharmacist is not a necessary requirement where items prescribed by a doctor have truly cured a patient and rendered him or her capable of living a normal life again; and
(d) the "recorded by a pharmacist" requirement can be ignored, if the prescribed substances made the difference for the taxpayer between life and death, or functioning and not functioning.
[12] The Minister applied to the Federal Court of Appeal for a judicial review of the Tax Court's findings. The Federal Court of Appeal allowed the Minister's appeal.
[13] Madam Justice Sharlow said the following in Ray v. The Queen:
[5] The legal issue in this case has been considered many times by the Tax Court. In all of those cases, except the one now under review, the phrase "as recorded by a pharmacist" was considered to be an essential element of paragraph 118.2(2)(n); see Poesiat Canada, [2003 DTC 4031] T.C.J. No. 503 (QL); Lajeunesse-Lebel v. Canada, [2002 DTC 3848] [2002] T.C.J. No. 46 (QL); Claussen Estate v. Canada, [2003 DTC 3955] [2003] T.C.J. No. 15 (QL); Bekker v. Canada, [2003 DTC 3948] [2002] T.C.J. No. 670 (QL); Lundrigan v. Canada, [2002 DTC 3850] [2002] T.C.J. No. 160 (QL); Melnychuk v. Canada, [2002 DTC 3856] [2002] T.C.J. No. 84 (QL); Noaille v. Canada, [2001 DTC 3794] [2001] T.C.J. No. 603 (QL); Bishoff v. Canada, [2001 DTC 3796] [2001] T.C.J. No. 597 (QL); Mauro v. Canada, [2001 DTC 3746] [2001] T.C.J. No. 415 (QL); Banman v. Canada, [2001 DTC 3701] [2001] T.C.J. No. 111 (QL); Mantha v. Canada, [99 DTC 3526] [1999] T.C.J. No. 500 (QL); Williams v. Canada, [98 DTC 3371] [1997] T.C.J. No. 1346 (QL); Mongillo v. Canada, [95 DTC 199] [1994] T.C.J. No. 831 (QL).
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[11] In my view, the Tax Court Judge erred in law when he concluded that the words "as recorded by a pharmacist" in paragraph 118.2(2)(n) could be ignored. I understand why he felt that those words represented an unjustifiable impediment to tax relief for Ms. Ray. Like the Tax Court Judge, I sympathize with Ms. Ray. However, it is not open to this Court, or the Tax Court, to disregard statutory requirements imposed by Parliament, even if they are difficult to rationalize on policy grounds. It is for Parliament alone to determine whether the words "as recorded by a pharmacist" should be removed from paragraph 118.2(2)(n).
[12] In my view, it is reasonable to infer that the recording requirement in paragraph 118.2(2)(n) is intended to ensure that tax relief is not available for the cost of medications purchased off the shelf. There are laws throughout Canada that govern the practice of pharmacy. Although the laws are not identical for each province and territory, they have common features. Generally, they prohibit a pharmacist from dispensing certain medications without a medical prescription, and they describe the records that a pharmacist is required to keep for medications dispensed by prescription, including information that identifies the prescribing person and the patient. There is no evidence that pharmacists anywhere in Canada are required to keep such records for the substances in issue in this case.
[13] I cannot accept the suggestion that, in the case of a medication that is prescribed by a physician but is purchased at a pharmacy off the shelf, a sales slip or invoice from the pharmacist would be a sufficient "recording" to meet the statutory requirement. A record in that form cannot meet the apparent function of the recording requirement. There must be a record kept by the pharmacist in his or her capacity as pharmacist. That necessarily excludes substances, however useful or beneficial, that are purchased off the shelf.
[14] While I have great sympathy for the Appellant I am in full agreement with the statement made by Madam Justice Sharlow in The Queen v. Ray that a Court cannot ignore the words "as recorded by a pharmacist" in paragraph 118.2(2)(n) of the Act. It therefore follows that the Appellant cannot claim a medical expense tax credit for "off the shelf" medications that he purchased in 2003.
[15] I also agree with the comments of Sharlow J.A. when she said in paragraph 11 of her decision in Ray:
. . . it is not open to this Court, or the Tax Court, to disregard statutory requirements imposed by Parliament, even if they are difficult to rationalize on policy grounds. It is for Parliament alone to determine whether the words "as recorded by a pharmacist" should be removed from paragraph 118.2(2)(n).
[16] Before concluding my remarks I wish to state that I was very impressed with the testimony of the Appellant. I was also impressed with the testimony of Heather Sulkers - Co-Chairperson of the Head and Neck Cancer Support Group - a Non-Profit Support Group for cancer patients, and I sympathize with their position. However, my function as a Judge of the Tax Court of Canada is to interpret the legislation. I do not have the authority to amend the legislation.
[17] If the Appellant wishes to pursue this matter further, I urge him to discuss the problem with his Member of Parliament.
[18] The appeal is dismissed, without costs.
Signed at Vancouver, British Columbia, this 29th day of July 2005.
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"L.M. Little" |
Little J.
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CITATION: |
2005TCC472 |
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COURT FILE NO.: |
2005-226(IT)I |
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STYLE OF CAUSE: |
Frank Rasler and Her Majesty the Queen |
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PLACE OF HEARING: |
Winnipeg, Manitoba |
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DATE OF HEARING: |
July 22, 2005 |
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REASONS FOR JUDGMENT BY: |
The Honourable Justice L.M. Little |
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DATE OF JUDGMENT: |
July 29, 2005 |
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APPEARANCES: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Julien Bédard |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Canada |