2015 FCA 156, 2015 FCA 156

[2016] 1 F.C.R. 388 A-381-14 2015 FCA 156 Her Majesty the Queen ( Appellant ) v . Trudy Tallon ( Respondent ) Indexed as: Canada v. Tallon Federal Court of Appeal, Trudel, Ryer and Rennie JJ.A.—Toronto, June 1 and July 2, 2015.

Income Tax –– Income Calculation –– Medical expense credit –– Appeal from Tax Court of Canada (T.C.C.) decision allowing respondent’s appeal from reassessment of 2009 taxation year –– T.C.C. directing Minister of National Revenue to reassess respondent on basis respondent entitled to medical expense tax credit (METC), as defined in Income Tax Act , s. 118.2(1), amount of which to be determined on basis that $25 727.21 in medical expenses incurred within meaning of Act, s. 118.2(2) in 2009 –– Respondent suffering from debilitating joint dysfunction, requiring prosthetic devices –– Respondent, spouse spending winters in warmer countries to alleviate respondent’s condition –– In 2009 tax return, respondent claiming $25 727.21 in medical expenses, giving rise to METC claim for 2009 –– Minister disallowing most expenses claimed on basis not meeting definition of medical expenses in Act, ss. 118.2(2)(g),(h) –– In 2008 T.C.C. decision involving respondent, similar expenses allowed as medical expenses –– In present case, T.C.C. following 2008 decision, concluding that disallowed expenses in fact incurred to obtain medical services for purpose of Act, ss. 118.2 (g),(h) –– Whether T.C.C. erring in concluding that disallowed expenses constituting medical expenses –– Respondent not demonstrating that medical services obtained by medical practitioners abroad unavailable thereto in home locality –– Thus, necessary to determine herein issue of whether salutary effects of warm climate in place located more than 40 kilometers from patient’s home locality considered medical service obtained by patient in that place for purposes of Act, ss. 118.2(2)(g),(h) –– Act, s. 118.2(2)(

a) clearly contemplating that medical service in question must be provided to patient by person or hospital –– As to s. 118.2(2)(g), Parliament intending to provide fiscal support through METC to Canadians required to travel from home communities to other locations to access specialized medical services not available where individuals living –– Purposive

interpretation of Act, s. 118.2(2)(

g) supporting conclusion that medical services contemplated thereby must be provided to patient by person or hospital –– Therefore, because salutary effects of warmer countries respondent travelling to not provided thereto by person or hospital, not constituting medical service obtained by respondent within meaning of either Act, s. 118.2(2)(

g) or (h) –– Consequently, disallowed expenses in present case not constituting medical expenses for purposes of METC –– Appeal allowed. This was an appeal from a Tax Court of Canada (T.C.C.) decision under the informal procedure allowing the respondent’s appeal from a reassessment of her 2009 taxation year.

The T.C.C. directed the Minister of National Revenue (Minister) to reassess the respondent on the basis that she was entitled to a medical expense tax credit (METC), as defined in subsection 118.2(1) of the Income Tax Act , the amount of which was to be determined on the basis that she had incurred medical expenses within the meaning of subsection 118.2(2) of the Act in the amount of $25 727.21 in 2009.

The respondent suffers from temporomandibular joint dysfunction, a debilitating condition that led to the replacement of the affected joints by prosthetic devices, which are adversely affected by cold winter temperatures. To alleviate this condition, the respondent and her spouse spent their winters in warmer countries such as Thailand, Indonesia, etc. from 1988 to 2009 where they sought relief from the cold Canadian winter climate. In her 2009 tax return, the respondent claimed that she had incurred medical expenses in 2009 for an amount of $25 727.21, which gave rise to a claim for a METC in that year.

In the reassessment, the Minister disallowed $17 530.52 of the medical expenses claimed by the respondent in 2009. The disallowed expenses related to the cost of airfares, accommodations and meals for the respondent and her husband for travel to Thailand and Indonesia between January 2 and May 4 of 2009 and for a trip to the U.S. to see a medical practitioner. It was concluded that such expenses did not meet the definition of medical expenses in paragraphs 118.2(2) (

g) and (

h) of the Act . The respondent objected to the reassessment claiming that expenses of a similar nature she incurred in 2008 had been allowed as medical expenses pursuant to a T.C.C. decision. Subsequently, the Minister allowed the cost of the trip to the U.S. as a medical expense but confirmed the reassessment regarding the balance of the disallowed expenses on the basis, in particular, that those costs did not constitute medical expenses. The T.C.C. decided to follow the 2008 decision and concluded that the disallowed expenses were incurred to obtain medical services for the purpose of paragraphs 118.2 (

g) and (

h) of the Act. On appeal, the appellant argued that the T.C.C. erred in law by concluding that the disallowed expenses constituted medical expenses, which the respondent incurred to obtain the pain alleviation benefits of the warm climate in Thailand and Indonesia. The respondent asserted that the T.C.C. did not conclude that the salutary effects of being in a warm climate were medical services in and of themselves. She claimed that it was open to the T.C.C. to find that her travel expenses were incurred to obtain medical services for the purposes of paragraphs 118.2 (

g) and (

h) of the Act based on the evidence and that no interpretative issue needed to be resolved. Accordingly, she submitted that the T.C.C. did not make any palpable or overriding error. The issue was whether the T.C.C. erred in concluding that the disallowed expenses constituted medical expenses. Held , the appeal should be allowed. The METC provides a measure of fiscal relief in relation to the specific types of medical expenses that are enumerated in paragraphs 118.2 (

a) to (

u) of the Act . Three of those paragraphs (118.2( a ), (

g) and ( h )) refer to “medical services” separately. The basis of the T.C.C.’s decision was not that asserted by the respondent. By following the 2008 T.C.C. decision relating to the respondent, the T.C.C. determined that the issue was the

interpretation of the term “medical services” in paragraphs 118.2(2) (

g) and (

h) of the Act. While the T.C.C. was aware of the requirement that the medical services contemplated by those paragraphs must not be available in the local community, nowhere in its reasons did it make any of the requisite factual findings regarding that requirement. Thus, the interpretative

issue raised by the appellant had to be resolved in this appeal. The respondent did not demonstrate, and the T.C.C. did not conclude, that the medical services that the respondent obtained from theThai and Indonesian medical practitioners were unavailable to her in her home locality. Thus, it had to be determined whether thesalutary effects of a warm climate in a place located more than 40 kilometers from a patient’s home locality could be considered amedical service obtained by the patient in that place for the purposes of paragraphs 118.2(2)(

g) and (

h) of the Act. Otherwise, thedisallowed expenses would not meet those provisions of the Act. A textual

interpretation of paragraph 118.2(2)(

a) makes it clear that the medical expenses contemplated thereby is the amount paid to amedical practitioner, nurse or a public or licensed private hospital for medical services that are provided by one of those persons to thepatient. Thus, paragraph 118.2(2)(

a) clearly contemplates that the medical service in question must be provided to the patient by a personor a hospital, in other words, a medical service provider. In paragraph 118.2(2)(

g) of the Act, the term “medical services” is also used but a pure textual

interpretation thereof does not clearlydemonstrate that a medical service can only be obtained from a person or hospital who or which provides such services. However, theclose proximity of this provision to paragraph 118.2(2)(

a) led to the conclusion that the clear textual

interpretation of paragraph 118.2(2)(

a) to that effect should carry over and become the correct

interpretation of the term “medical services” in paragraph 118.2(2)(

g) of theAct. A purposive analysis of paragraph 118.2(2)(

g) thereof led to the conclusion that by enacting this provision, Parliament intended toprovide fiscal support through the METC to Canadians who are required to travel from their home communities to other locations inorder to access specialized medical services that are not available to them where they live. The circumstances in which such fiscalsupport will be available have been carefully circumscribed by the limitations that are spelled out in this paragraph. Such limitationscannot be ignored or relaxed in the face of sympathetic circumstances. This purposive

interpretation of paragraph 118.2(2)(

g) supportedthe conclusion that the medical services contemplated thereby must be provided to the patient by a person or hospital. In paragraph118.2(2)(h), the term “medical services” therein should also be interpreted, for the same reasons, as being obtained by the patient from aperson or hospital. Therefore, because the salutary effects of the warm Thai and Indonesian climates were not provided to the respondent by a person orhospital, those effects could not constitute a medical service obtained by the respondent within the meaning of either paragraph118.2(2)(

g) or (

h) of the Act. Consequently, the disallowed expenses in this case did not constitute medical expenses for the purposes ofthe METC. STATUTES AND REGULATIONS CITED

An Act to Amend the Income Tax Act, the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Federal-Provincial FiscalArrangements and Federal Post-Secondary Education and Health Contribution Act, 1977 and certain related Acts, S.C. 1988, c. 55, s.92. Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, ss. 118.2(1),(2). CASES CITED APPLIED: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, [2005] 2 S.C.R. 601;R. v. Clark, 2005 SCC 2, [2005] 1 S.C.R. 6. CONSIDERED: Tallon v. The Queen, 2014 TCC 193, [2015] 1 C.T.C. 2038; Tokarski v.

The Queen, 2012 TCC 115, 2012 D.T.C. 1138. REFERRED TO: Goodwin v. The Queen, , [2001] 4 C.T.C 2906 (T.C.C.). APPEAL from a Tax Court of Canada decision (2014 TCC 193, [2015] 1 C.T.C. 2038) allowing the respondent’s appeal from areassessment of her 2009 taxation year, which involved entitlement to the medical expense tax credit. Appeal allowed. APPEARANCES André LeBlanc and Ryan Gellings for appellant. Leigh Somerville Taylor for respondent. SOLICITORS OF RECORD Deputy Attorney General of Canada for appellant. Leigh Somerville Taylor Professional Corporation, Toronto, for respondent.

The following are the reasons for judgment rendered in English by [1] Ryer J.A.: This is an appeal by Her Majesty the Queen (the Crown) from a decision ([Tallon v. The Queen] 2014 TCC 193,[2015] 1 C.T.C. 2038) of Justice Judith Woods (the Judge) of the Tax Court of Canada, dated June 10, 2014, under the informalprocedure of that Court. The Judge allowed the appeal of Ms. Trudy Tallon (the taxpayer) from a reassessment (the reassessment) of her2009 taxation year, dated October 25, 2010.

[ 2 ] The Judge directed the Minister of National Revenue to reassess the taxpayer on the basis that she was entitled to a medical expense tax credit (a METC), as defined in subsection 118.2(1) of the Income Tax Act , R.S.C., 1985 (5th Supp.), c. 1 (the Act), the amount of which was to be determined on the basis that she had incurred medical expenses (medical expenses), within the meaning of subsection 118.2(2) of the Act, in the amount of $25 727.21, in 2009. I.

BACKGROUND [ 3 ] The taxpayer suffers from temporomandibular joint dysfunction, a debilitating condition that led to the replacement of the affected joints by prosthetic devices. These prosthetics are adversely affected by the cold winter temperatures that are common in her home in Thunder Bay, Ontario. To alleviate her condition, she and her husband spend their winters in warmer countries.

To that end, in the period from 1988 to 2009, they have travelled to Thailand, Indonesia, Cambodia, Vietnam, Malaysia, Philippines, Burma, Ecuador, Venezuela, Honduras, Mexico and Costa Rica, seeking relief from the cold Canadian winter climate. [ 4 ] One of the taxpayer’s doctors, who practices in Texas, expressed the view that she had “no choice but to seek a warmer climate during the coldest six months of the year”.

Another of her doctors, a Canadian practitioner, recommended that when travelling to warmer climates, she should be accompanied by her husband as a travel companion. [ 5 ] In her 2009 income tax return, the taxpayer claimed that she had incurred medical expenses in 2009, in the aggregate amount of $25 727.21, which gave rise to a claim for a METC in that year. [ 6 ] In the reassessment, the Minister of National Revenue (the Minister) disallowed $17 530.52 of the medical expenses claimed by the taxpayer in 2009 (the disallowed expenses). [ 7 ] The disallowed expenses related to the cost of airfares, accommodations and meals for the taxpayer and her husband for a trip that they made to Thailand and Indonesia between January 2 and May 4 of 2009 and also for a trip to Dallas, Texas.

The Minister concluded that such expenses did not meet the definition of medical expenses in paragraphs 118.2(2) (

g) and (

h) of the Act , which are reproduced below. [ 8 ] The taxpayer objected to the reassessment on the basis that expenses of a similar nature, which she incurred in 2008, had been allowed as medical expenses, pursuant to a judgment of Justice Lucie Lamarre of the Tax Court of Canada, dated May 4, 2011, under the informal procedure of that Court ( Tallon 2008). [ 9 ] On June 5, 2012, the Minister allowed the cost of the trip to Dallas as a medical expense but confirmed the reassessment with respect to the balance of the disallowed expenses on the basis that those costs did not constitute medical expenses and that the decision in Tallon 2008 was made under the informal procedure of the Tax Court of Canada and was therefore not binding on the Minister for the purposes of the reassessment.

For the purposes of the balance of these reasons, a reference to the disallowed expenses will be to the amount applicable to the taxpayer’s trip to Thailand and Indonesia. [ 10 ] The taxpayer appealed the reassessment to the Tax Court of Canada and the matter was heard by the Judge on June 3, 2014. II. THE RELEVANT PROVISIONS OF THE ACT [ 11 ] The provisions of the Act that were in issue before the Tax Court of Canada and that are in issue in this appeal are reproduced below: 118.2 …

Medicalexpenses(2) For the purpose of subsection (1), a medical expense of an individual is an amount paid (

a) to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of medical or dental servicesprovided to a person (in this subsection referred to as the “patient”) who is the individual, the individual’s spouse or common-law partner or a dependant of the individual (within the meaning assigned by subsection 118(6)) in the taxation year in whichthe expense was incurred; … (

g) to a person engaged in the business of providing transportation services, to the extent that the payment is made for thetransportation of (

i) the patient, and (ii) one individual who accompanied the patient, where the patient was, and has been certified in writing by a medicalpractitioner to be, incapable of travelling without the assistance of an attendant from the locality where the patient dwells to a place, not less than 40 kilometres from that locality, where medical services arenormally provided, or from that place to that locality, if (iii) substantially equivalent medical services are not available in that locality, (iv) the route travelled by the patient is, having regard to the circumstances, a reasonably direct route, and (

v) the patient travels to that place to obtain medical services for himself or herself and it is reasonable, having regard to thecircumstances, for the patient to travel to that place to obtain those services; (

h) for reasonable travel expenses (other than expenses described in paragraph (g)) incurred in respect of the patient and,where the patient was, and has been certified in writing by a medical practitioner to be, incapable of travelling without theassistance of an attendant, in respect of one individual who accompanied the patient, to obtain medical services in a place thatis not less than 80 km from the locality where the patient dwells if the circumstances described in subparagraphs (g)(iii) to (v)apply; III.

THE TAX COURT OF CANADA DECISION [12] Before the Tax Court of Canada, the Crown argued that the disallowed expenses did not qualify as medical expenses because thetaxpayer incurred such costs to obtain the salutary effects of the warm climate in Thailand and Indonesia and not to obtain medicalservices from medical practitioners or hospitals in those countries. [13] Relying on the decision in Goodwin v.

The Queen, , [2001] 4 C.T.C 2906 (T.C.C.), the Crown asserted that thesalutary effects of a warm climate in relation to the taxpayer’s condition did not constitute a medical service, within the meaning ofsub-paragraph 118.2(2)(g)(v). [14] In paragraph 10 of her reasons, the Judge described the essential issue before her: This appeal concerns the legislative requirements for a METC with respect to the travel expenses incurred to obtain medical services.

Inorder to qualify, the medical expenses must not be available in the local community, the route taken must be a direct route, and it must bereasonable for the taxpayer to travel to that place to obtain the services. [15] The Judge then determined that she would follow the decision in Tallon 2008 and concluded that the disallowed expenses wereincurred to obtain medical services for the purpose of paragraphs 118.2(2)(

g) and (

h) of the Act. She also concluded that the medicalpractitioner certificate requirement in paragraph 118.2(2)(

h) had been satisfied by a letter from one of the taxpayer’s doctors. IV. ISSUE [16] The issue is whether the Judge erred in concluding that the disallowed expenses constitute medical expenses. V. STANDARD OF REVIEW [17] The issue of whether the disallowed expenses constitute medical expenses is a question of mixed fact and law. As taught byHousen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paragraphs 27 and 28, the finding of a trial judge with respect to this type ofquestion cannot be overturned on appellate review unless the finding is based on a palpable and overriding error.

An error is palpable ifit is clear, and overriding if it is serious enough to affect the outcome in the case. If a question of mixed fact and law contains a discreteand readily extricable question of law, that legal question will be reviewable by this Court on the standard of correctness. VI. THE POSITIONS OF THE PARTIES [18] Before this Court, the Crown asserts that the Judge erred in law when she concluded that the disallowed expenses constitutemedical expenses.

The Crown contends that the taxpayer incurred the disallowed expenses for the purpose of obtaining the painalleviation benefits of the warm climate in Thailand and Indonesia. Thus, according to the Crown, the discrete and extricable legal issueis whether, by obtaining, those benefits, the taxpayer has obtained a medical service, within the meaning and for the purposes ofparagraphs 118.2(2)(

g) and (

h) of the Act. [19] Counsel for the taxpayer asserts that the Judge did not conclude that the salutary effects of being in a warm climate were, in and

of themselves, medical services. As such, according to the taxpayer, the interpretative issue raised by the Crown does not arise. [ 20 ] Instead, counsel for the taxpayer asserts, in paragraph 9 of her factum: … the Court specifically concluded that the respondent’s travel expenses incurred in 2009 “were to obtain medical services for the purposes of s. 118.2 (

g) and ( h )” of the Act . As a result, the taxpayer asserts that this finding, being largely factual, must be sustained on the basis that it was open to the Judge on the evidence before her, and no palpable and overriding error having been established. [ 21 ] This position is reiterated in paragraph 18 of the taxpayer’s factum, which reads as follows: This is not a case of the Tax Court holding that travel to warmer climate is and always is a deductible medical expense. Here the respondent suffers a debilitating and degenerative affliction, caused by medical services she received in Canada.

Her treatment in the 2009 taxation year was not therapeutic occasional exposure to sunlight to treat psoriasis. The Minister did not argue at the Tax Court that any of the respondent’s out of country medical expenses were not “medical services,” as in the case of a hot tub installed at a relative’s home.

Here, the respondent “had no choice,” but to seek medical care outside of Canada and without seeking that medical care in a climate where her pain could not be managed by narcotics, her expert physician posited that she would continue degenerating and would possibly require hospitalization. [Footnotes omitted.] VII. DISCUSSION Background [ 22 ] In the late 1980s, the METC was enacted to replace a medical expense deduction that was previously available. (See:

An Act to Amend the Income Tax Act, the Canada Pension Plan, the Unemployment Insurance Act, 1971, the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contribution Act, 1977 and certain related Acts , S.C. 1988, c. 55,

section 92). The METC provides a measure of fiscal relief in relation to the specific types of medical expenses that are enumerated in paragraphs 118.2(2) (

a) to (

u) of the Act . [ 23 ] Three of these paragraphs— paragraphs 118.2(2) ( a ), (

g) and ( h )—make reference to “medical services”. [ 24 ] Paragraph 118.2(2)(

a) includes as a medical expense an amount paid to a medical practitioner, nurse or a public or licensed private hospital in respect of medical services provided to a person, referred to in subsection 118.2(2) of the Act as the patient, who is the individual claiming the METC, the individual’s spouse or common-law partner, or a dependent of the individual. In the context of this appeal, the medical services at issue relate only to the appellant who is the patient, as well as the individual taxpayer seeking to claim a METC. [ 25 ] Paragraph 118.2(2)(

g) includes as a medical expense an amount paid to a person in the business of providing transportation services for transportation of the patient, and a necessary accompanying person, from the locality in which the patient dwells to and from a place more than 40 kilometers away, where medical services are normally provided, if: • substantially equivalent medical services are not available in that locality; • the route taken to that place is reasonably direct; and • the patient travels to that place to obtain medical services for himself or herself and travelling to that place to obtain such services is reasonable. [ 26 ] Paragraph 118.2(2)(

h) includes as a medical expense an amount paid for reasonable travel expenses (other than transportation costs described above) incurred in respect of the patient to obtain medical services in a place not less than 80 kilometers away from the locality in which the patient dwells. Also included are similar costs incurred in respect of an attending person where the patient has been certified by a medical practitioner to be incapable of travelling without assistance.

What did the Judge decide? [ 27 ] The differing perspectives of the parties to this appeal make it necessary to determine the basis of the Judge’s decision. This task is made difficult by virtue of the fact that the decision in Tallon 2008 that the Judge followed was before neither her nor this Court. [ 28 ] In my view, the basis of the Judge’s decision cannot be that asserted by the taxpayer. I conclude that by following Tallon 2008, the Judge determined that the issue was the

interpretation of the term “medical services” in paragraphs 118.2(2) (

g) and (

h) of the Act . [ 29 ] The taxpayer’s argument to the contrary is unpersuasive. The Judge was aware of the requirement that the medical services contemplated by those paragraphs “must not be available in the local community” (paragraph 10 of the Judge’s reasons). However, nowhere in her reasons did the Judge make any of the requisite factual findings in relation to that requirement. Indeed, a portion of the transcript of the hearing before the Judge, which is contained at page 119 of the appeal book, contains testimony of the taxpayer’s spouse that would have precluded any such finding by the Judge. Q.

You are not claiming that you travelled to these countries to access medical services that are not available in Canada, though. You say you are travelling there for the climate. A. Yes, we travel for the climate, and a large benefit is if there are medical services available. Yes they are available here in Canada, but a lot of times access is much better in Thailand. We are there for months, so there is no “you can wait until you get home” kind of thing. You have to look after these issues as soon as humanly possible.

Accordingly, I conclude that the interpretative issue raised by the Crown must be resolved in this appeal. The interpretative question [ 30 ] In formulating the discrete interpretative question, it is worthwhile to recall that the Crown takes no issue with the classification as medical expenses, within the meaning of paragraph 118.2(2) (

a) of the Act , of amounts paid by the taxpayer for the services of the medical practitioners who she consulted in Thailand and Indonesia in 2009.

In addition, as I have previously determined, the taxpayer did not demonstrate, and the Judge did not conclude, that the medical services that were obtained by the taxpayer from the Thai and Indonesian medical practitioners were unavailable to the taxpayer in her home locality. [ 31 ] Thus, the discrete interpretative issue in this appeal is whether the salutary effects of a warm climate in a place located more than 40 kilometers from a patient’s home locality can be said to be a medical service obtained by that patient in that place for the purposes of paragraphs 118.2(2) (

g) and (

h) of the Act . If not, then the disallowed expenses will not meet the requirements of those provisions of the Act and the appeal must be allowed. The Tax Court jurisprudence [ 32 ] At the Tax Court of Canada level, the jurisprudence which touches upon this interpretative issue is inconsistent. Thus, it falls to this Court to provide an

interpretation. The approach to

interpretation of the Act [ 33 ] The proper approach to the

interpretation of provisions of the Act is well described in the following excerpt from the decision of the Supreme Court of Canada in Canada Trustco Mortgage Co. v. Canada , 2005 SCC 54 , [2005] 2 S.C.R. 601 (at paragraph 11 ): ….There is no doubt today that all statutes, including the Income Tax Act , must be interpreted in a textual, contextual and purposive way. However, the particularity and detail of many tax provisions have often led to an emphasis on textual

interpretation.

Interpretation of “medical services” [ 34 ] The term “medical services” is used in three separate paragraphs in subsection 118.2(2) of the Act . A contextual interpretative approach favours a consistent

interpretation of that term in each of those provisions. As noted by Fish J. in R. v. Clark , 2005 SCC 2 , [2005] 1 S.C.R. 6, at paragraph 51 , “[p]arliament could not have intended that identical words should have different meanings in two consecutive and related provisions of the very same enactment.” [ 35 ] The first usage of this term is in paragraph 118.2(2) (

a) of the Act . The relevant portions of that provision are reproduced again for ease of reference: 118.2 … Medical expenses

(2) For the purposes of subsection (1), a medical expense of an individual is an amount paid (

a) to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of medical or dental services provided to a person (in this subsection referred to as the “patient”) who is the individual, the individual’s spouse or common- law partner or a dependant of the individual (within the meaning assigned by subsection 118(6)) in the taxation year in which expense was incurred; [ 36 ] In the factual context before this Court, a textual

interpretation of this provision makes it clear that the medical expense contemplated by this paragraph is the amount paid to a medical practitioner, nurse or a public or a licensed private hospital for medical services that are provided by one of those persons to the patient. Thus, it is clear that paragraph 118.2(2) (

a) of the Act contemplates that the medical service in question must be provided to the patient by a person or a hospital. In other words, for the purposes of paragraph 118.2(2) ( a ), a medical service must be obtained from a medical service provider. [ 37 ] The term “medical services” is also used in paragraph 118.2(2) (

g) of the Act , in which it appears four times. For ease of reference, that provision is reproduced again: 118.2 … (2) … (

g) to a person engaged in the business of providing transportation services, to the extent that the payment is made for the transportation of (

i) the patient, and (ii) one individual who accompanied the patient, where the patient was, and has been certified in writing by a medical practitioner to be, incapable of travelling without the assistance of an attendant from the locality where the patient dwells to a place, not less than 40 kilometres from that locality, where medical services are normally provided, or from that place to that locality, if (iii) substantially equivalent medical services are not available in that locality, (iv) the route travelled by the patient is, having regard to the circumstances, a reasonably direct route, and

(

v) the patient travels to that place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the patient to travel to that place to obtain those services; [ 38 ] A pure textual

interpretation of this paragraph does not clearly demonstrate that a medical service can only be obtained from a person or hospital who or which provides such services. However, the close proximity of this provision to paragraph 118.2(2) (

a) of the Act leads me to conclude that the clear textual

interpretation of paragraph 118.2(2)( a ), to that effect, should carry over and become the correct

interpretation of the term “medical services” in paragraph 118.2(2)(

g) of the Act. [ 39 ] A purposive analysis of paragraph 118.2(2) (

g) of the Act leads me to conclude that by enacting this provision, Parliament intended to provide fiscal support, through the METC, to Canadians who are required to travel from their home communities to other locations in order to access specialized medical services that are not available to them where they live. That said, the circumstances in which such fiscal support will be available have been carefully circumscribed by the limitations that are spelled out in this paragraph. Such limitations cannot be ignored or relaxed in the face of sympathetic circumstances. [ 40 ] To place my purposive

interpretation in the Canadian context, I can do no better than to reproduce paragraphs 16 to 18 of the Tax Court of Canada’s decision in Tokarski v. The Queen , 2012 TCC 115 , 2012 D.T.C. 1138, which read as follows: The Respondent’s counsel also went through the legislative history of this provision that allowed travel costs as a medical expense. It was first added in 1973 for travel if more than 25 miles was required to obtain the medical service.

The budget speech at that time referred to this amendment as travel to obtain medical services “at a hospital, clinic or doctor’s office” and went on to say “This is expected to assist people in remote or rural areas or people requiring specialized treatment in distant centres.” Respondent’s counsel went further and referred me to Commons Debates of April 5, 1973 and April 6, 1973. On April 5, the Honourable John N.

Turner (Minister of Finance) stated as follows: It is also proposed to include as a deductible medical expense amounts paid to commercial transport services for transportation of a taxpayer or his spouse, or dependent, and an attendant if necessary, to and from hospital, clinic or doctor’s office to which the individual has travelled a distance in excess of 25 miles to obtain medical services not otherwise available nearer home.

I believe that this will be of untold benefit to those living in smaller communities across Canada where some of the specialized medical services are not close or easily available and where Canadians go to the larger centres for more specialized treatment. On April 6 another member of the House of Commons spoke of the amendment as follows: We also have the fact that all across Canada the facilities and services available to society are fewer in the rural and lesser populated areas than they are in the urban centres.

Invariably, or almost universally across the land, if you have an extreme or rare ailment, or even moderately rare ailment, you do not get the medical attention that is necessary in your home town if it is a smaller sized community. You have to travel to the larger centre to get that. In Manitoba, the movement of people has to be towards Winnipeg, Brandon and Portage – that part of the province – in order to get the special medical attention that may be necessary. In British Columbia, it is to Vancouver or to Victoria on Vancouver Island.

I do not know Ontario that well, but I am quite sure that people in Northern Ontario do not have medical facilities available to them to the extent that they are available to people in the Toronto-Hamilton area. [ 41 ] This purposive

interpretation of paragraph 118.2(2)(

g) supports my conclusion that the medical services contemplated by this provision must be provided to the patient by a person or hospital. [ 42 ] The final usage of the term medical services in subsection 118.2(2) of the Act appears in paragraph (

h) thereof. In my view, for substantially the same reasons given above, I conclude that medical services as used in that paragraph must also be obtained by the patient from a person or hospital. [ 43 ] Thus, I conclude that because the salutary effects of the warm Thai and Indonesian climates were not provided to the taxpayer by a person or hospital, those effects cannot constitute a medical service obtained by the taxpayer, within the meaning of either of paragraph 118.2(2) (

g) or (

h) of the Act . [ 44 ] As a consequence of these

interpretations, the disallowed expenses do not constitute medical expenses for the purposes of the METC. VIII. DISPOSITION [ 45 ] For the foregoing reasons, I would allow the appeal. As agreed by the parties, costs in the amount of $19 424.06 shall be payable by the Crown to the taxpayer. Trudel J.A.: I agree. Rennie J.A.: I agree.