Tax Court of Canada


Tax

Income tax

Tax credits

Proper meaning of word “therapy” in disability tax credit provisions meant care or treatment of physical or mental condition

Taxpayer’s dependent daughter was born with phenylketonuria (PKU), which required following very specific dietary treatment plan to avoid brain damage. Canada Revenue Agency (CRA) determined that taxpayer was not entitled to claim disability tax credit in respect of her daughter because impairment related to dietary restriction and treatment activities consisted of following dietary regime. Taxpayer appealed. Appeal allowed. Taxpayer spent more than 14 hours weekly on average on treatment and management of daughter’s PKU, after some adjustments to taxpayer’s calculations. Some flexibility in precision of hours should be allowed in these cases. Proper meaning of word “therapy” in disability tax credit provisions meant care or treatment of physical or mental condition. Scope of qualifying activities in case of PKU was described in another judgment. Therapy sustained daughter’s vital mental functions, as without it, she would have potentially devastating and irreversible damage to her mental functioning. Daughter’s treatment was not simply dietary restriction. Counting and managing consumption of phenylalanine was more like administering medication than managing diet. Impairment that limited what person was capable of processing as nutrition without causing severe bodily damage might be considered in giving humane, compassionate and common sense interpretation to requirement of marked restriction in feeding him or herself. 

Hughes v. The Queen (2018), 2018 CarswellNat 1262, 2018 CarswellNat 725, 2018 TCC 42, 2018 CCI 42, Patrick Boyle J. (T.C.C. [Informal Procedure]).

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