[OFFICIAL ENGLISH TRANSLATION]
96-316(IT)I
97-2549(IT)I
BETWEEN:
BERNADETTE DESBIENS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
___________________________________________________________________
Appeals heard on common evidence on January 8, 1998,
by the Honourable Judge Guy Tremblay
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Alain Garceau
___________________________________________________________________
JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1995 and 1996 taxation years are dismissed in accordance with the attached Reasons for Judgment.
Signed at Québec, Canada, this 27th day of January 1998.
"Guy Tremblay"
J.T.C.C.
Translation certified true
on this 3rd day of June 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 19980127
Dockets: 96-316(IT)I
97-2549(IT)I
BETWEEN:
BERNADETTE DESBIENS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tremblay, J.T.C.C.
Issue
[1] According to the Notices of Appeal and the Replies to the Notices of Appeal, at issue is whether, in filing her income tax returns for the 1995 and 1996 taxation year, the appellant was entitled to the non-refundable income tax credit for dependants age 18 years or older with a severe and prolonged physical or mental impairment, taking into account the said dependants' income.
Burden of proof
[2] The onus is on the appellant to establish that the assessments made by the respondent are unfounded. This onus results from a number of court decisions, including the Supreme Court of Canada decision in Johnston v. Minister of National Revenue.[1]
[3] In that decision, the Supreme Court also ruled that the assumptions of fact relied on by the respondent in making the assessments or reassessments are assumed to be true until proven otherwise.
Appeal 97-316(IT)I
[4] In the present case, the assumptions of fact relied on by the respondent are set out in subparagraphs 3(a) and 3(b) of the Reply to the Notice of Appeal. Paragraph 3 reads as follows:
[translation]
3. In making the June 10, 1996, assessment for the 1995 taxation year, the Minister relied on the following assumptions of fact in particular:
(a) for the 1995 taxation year, the total income of the appellant's two sisters, Jeannette Desbiens and Étiennette Desbiens, was $8,026 and $7,932 respectively; [admitted]
(b) the appellant was therefore not entitled to the non-refundable income tax credit for dependants because, under the Income Tax Act ("the Act"), total income of the two sisters was too high;
Appeal 97-2549(IT)I
[5] In docket number 97-2549(IT)I, the assumptions of fact relied on by the respondent are set out in subparagraphs 3(a) to 3(i) of the Reply to the Notice of Appeal and they read as follows:
[translation]
3. In making this assessment for the 1996 taxation year, the Minister relied on the following assumptions of fact in particular:
(a) for the 1996 taxation year, the net income of each of the appellant's two sisters, Jeannette Desbiens and Étiennette Desbiens, exceeded $4,273;
(b) Jeannette Desbiens and Étiennette Desbiens are not dependants of the appellant to whom the disability amount may be transferred;
(c) on the income tax return she filed for the 1996 taxation year, in computing her non-refundable income tax credits, the appellant did not claim any amount for dependants age 18 or older with an impairment;
(d) the appellant was therefore not entitled to the non-refundable income tax credit for dependants with an impairment because, under the Income Tax Act ("the Act"), the total income of the two sisters was too high;
(e) furthermore, with respect to her two sisters, Jeannette Desbiens and Étiennette Desbiens, the appellant filed Certificates (form T2201A) for a Disability Tax Credit transferred from dependants other than a spouse, which certificates were dated September 16, 1996, and duly signed by Dr. André Fleury ("the medical doctor");
(f) according to form T2201, the appellant's two sisters did not meet the eligibility criteria;
(g) the medical doctor diagnosed that Jeannette Desbiens and Étiennette Desbiens were not limited in performing the activities of daily living;
(h) in a January 14, 1997, telephone conversation with the medical doctor, he confirmed that, for each of the two sisters, the illness was controlled by medication and the impairment was intermittent;
(i) in accordance with the Act, the Minister therefore disallowed the appellant the non-refundable disability tax credit transferred from dependants other than a spouse.
[6] For the purposes of this case, counsel for the respondent admitted in the Reply to the Notice of Appeal that, although the assumptions of fact indicated otherwise, the appellants' two sisters met the criteria for persons with a severe and prolonged impairment. Counsel for the respondent wanted to limit his arguments to these persons' income, in accordance with section 118(1)(d) of the Income Tax Act ("the Act").
[7] The appellant testified that the amounts her sisters received from social assistance were barely adequate to pay for drugs such as argatil, nozinam and other similar drugs. The main effect of these drugs is to slow brain cell malfunction. The side effects experienced, however, are dilation of the pupil of the eye and allergy to sunlight. Because of this, sunglasses and a steady supply of sunscreen must be purchased.
[8] As well, the two sisters had insulin-dependent diabetes, which required the purchase of a glucose monitor, strips, lancets and insulin.
[9] The appellant argued that, the Quebec government having reduced its drug spending, the amounts received from social assistance constituted her sisters' taxable income; these amounts were inadequate to pay for the drugs.
[10] Section 118(1)(d) of the Act applicable to the 1993 and following taxation years reads as follows:
118(1)(d) Dependants - for each dependant of the individual for the year who
(i) attained the age of 18 years before the end of the year, and
(ii) was dependent on the individual because of mental or physical infirmity,
an amount determined by the formula
$1,471 - (E - $2,500)
where
E is the greater of $2,500 and the income for the year of the dependant.
[11] In 1995, concerning Jeannette, the calculation is as follows:
$1,471 - ($8,026 - $2,500 = $5,526)
$1,471 - $4,055 = 0
Concerning Étiennette, the calculation is as follows:
$1,471 - ($7,932 - $2,500 = $5,432)
$1,471 - $3,961 = 0
[12] In 1996, the calculation is similar since the income exceeds $4,273:
$1,471 - ($4,273 - $2,500 = $1,773)
$1,471 - $1,773 = 0
[13] Despite all the sympathy the Court has for the appellant, it is obliged to apply the Act as enacted by Parliament. The Court does not legislate; it applies the Act.
Conclusion
[14] For the above-noted reasons, the appeal is dismissed.
"Guy Tremblay"
J.T.C.C.
Signed at Québec, Canada, this 27th day of January 1998.
Translation certified true
on this 3rd day of June 2003.
Sophie Debbané, Revisor