http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/127513/index.do
Leibovich v. The Queen (January 6, 2016 – 2016 TCC 6, Smith J.).
Précis: The taxpayer’s son had a learning disability and she placed him in a private high school with a good reputation for dealing with such problems. She claimed the tuition expense as a medical expense. CRA denied the deduction of the tuition expense and she appealed to the Tax Court. The Court dismissed the appeal, without costs, on the basis that the school in question did not have programs or equipment specifically addressing the son’s disability. It was a good school, but not a specialist school.
Decision: The facts of this case were not in dispute:
[1] For the 2011 taxation year, the Appellant included tuition fees paid to the St. George’s School of Montreal (“St. George’s”) as “medical expenses” in the computation of her medical expense tax credit pursuant to subsection 118.2(2) of the Income Tax Act (the “Act”)1.
[2] The tuition fees were paid for the attendance of the Appellant’s infant son, J. It is not disputed that the amount paid was $18,560.12.
[3] The Minister denied the credit on the basis that the tuition fees were not “medical expenses”. Paragraph (e) of subsection 118.2(2) includes as “medical expenses”, an amount paid:
(e) for the care, or the care and training, at a school, an institution or another place of the patient, who has been certified in writing by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specially provided by that school, institution or other place for the care, or the care and training, of individuals suffering from the handicap suffered by the patient;
[4] At the outset of the hearing, the Respondent conceded that J suffered from a “mental handicap” for the purposes of the paragraph noted above (though this point had initially been disputed in the pleadings). The remaining issues in this appeal can thus be summarized as follows:
a) does the school (“St. George’s”) specially provide equipment, facilities or personnel for the care, or the care and training of individuals suffering from the handicap suffered by J; and
b) for the relevant taxation year, has J been certified as someone who, by reason of his mental handicap, requires the equipment, facilities or personnel specially provided by St. George’s.
The Court heard evidence of the quality of education at St. George’s:
[17] Following his graduation from UTS, J was enrolled in St. George’s for the grade 8 academic year. Mr. Evans produced a copy of St. George’s 2015-2016 School Prospectus and provided a description of the school. He testified that it was highly regarded in the academic community and viewed favourably because of its low teacher-pupil ratio as compared to public schools. It could also offer the opportunity for one-on-one work and accommodate J’s needs.
[18] Mr. Evans testified that approximately 40% of the students in J’s class suffered from some form of learning disability and that, although it was not advertised, it was generally well known in the community that St. George’s catered to student suffering from learning disabilities.
[19] The Appellant testified that St. George’s was informed of J’s learning disabilities, that copies of the Clinical Reports were provided to them prior to his admission, that they expressed the view that they would be able to accommodate his concerns and that J would be well served.
[20] The Appellant tendered as evidence, a copy of J’s academic record for the year ending June 2015 - a rather glowing report with an average of 86.88% for that year. The report was also tendered to attest to St. George’s success in accommodating and dealing with J’s learning disabilities.
The Court concluded that St. George’s, while a good school with a good reputation, did not meet the requirements of paragraph 118.2(2)(e):
[44] Does St. George’s specially provide equipment, facilities or personnel for the care or the care and training of persons suffering from the handicap suffered by J?
[45] Mr. Evans’ has argued that it does but I find that there is little in the way of corroborating evidence to support his position and that the documentary evidence points in the opposite direction. The school prospectus does not refer to any special program for children suffering from learning disabilities and in fact the evidence before the court is that it “does not specifically cater to students with learning disorders”. The Letter goes on to say that it is able to provide an enhanced curriculum, various resources and an environment that nurtures all of its students including “many with a broad variety of learning disabilities”. In my view, that is insufficient to support a finding that the school specially provides equipment, facilities or personnel for the care and training of students suffering from disabilities for the purpose of paragraph 118.2(2)(e).
[46] Reviewing the requirements of the case law noted above, I find that the school in question simply does not meet the threshold. It offers the same school program and curriculum to all students and the adapted academic environment offered to J and other students with learning disabilities, as described by Mr. Evans, is incidental and ancillary to its primary or dominant purpose of providing a high school education to all its students, including J.
The Court also found that the certification produced by the taxpayer did not meet the requirements of paragraph 118.2(2)(e):
[47] The next issue relates to certification and the question is whether an appropriately qualified person has certified that J, by reason of his mental handicap, requires the equipment, facilities or personnel specially provided by St. George’s.
[48] I accept that J was diagnosed by appropriately qualified persons as someone who suffered from a medically recognized learning disability, that he required special attention and an adapted academic environment but find that the Clinical Reports fail to establish a need for special equipment, facilities or personnel. Although there are practical suggestions such as the use of a personal FM auditory system and visual learning aids, for example, many of the recommendations would apply to the general student population. In any event, I have already concluded that any accommodation provided to J by St. George’s was at best incidental and ancillary.
As a result the appeal was dismissed, without costs as this was an informal procedure appeal.