Wife of Canadian with disability wins historic tax case against CRA

Disability Tax Credit Certificate case won by Lembi Buchanan in 2001 had reverberations across Canada

Archive Nov 2001 Part of a series reporting the ten years of harassment of Canadians with disabilities by Canada Revenue Agency- Lembi Buchanan represented her husband in a landmark case at the Federal Tax Court when CRA refused his Disability Tax Credit.  Buchanan won in court and became an important advocate for people with disabilities. She served on the “Technical Advisory Committee on Tax Treatment for Persons with Disabilities which led to a major overhaul of the eligibility criteria for the DTC, especially for persons with mental impairments.”

by Lembi Buchanan, from ARCH

When is a disability not a disability?

The bureaucrats at Canada Customs and Revenue Agency (“CCRA”) believe that they know exactly where to draw the line. Instead of relying on the medical profession for an accurate and fair assessment of the severity of each patient’s disability according to the eligibility criteria in the Income Tax Act, CCRA has revised the Disability Tax Credit (“DTC”) Certificate, form T2201, to simplify the process. What could be easier for the physician than checking off a few “yes” and “no” boxes?

Of course, nothing in life is quite that simple. The current DTC form has created a hurdle that is virtually impossible for every individual disabled by a severe mental impairment to surmount because the federal government has made two assumptions that are not true:

1. individuals with a severe and prolonged mental impairment cannot think, perceive or remember, and

2. individuals with a severe and prolonged mental impairment cannot manage or initiate personal care without constant supervision.

The recent court case of Buchanan v. Her Majesty the Queen underlines the urgent need for a full review the DTC Certificate because it discriminates against individuals with severe and prolonged mental impairments.

The wording of the questionnaire (which solicits only “yes” and “no” answers) with respect to mental functions in the DTC Certificate does not provide any latitude for the medical profession when assessing the severity of a mental impairment even though judges in a number of court cases have ruled otherwise. In fact, doctors are advised to “answer no only when their patients cannot manage or initiate their own personal care without constant supervision.” The questions in a follow-up form sent to physicians requesting further “clarification” also misrepresent the objectives of the Income Tax Act, ignore the legal standards set out in the Act and disregard case law.

In recent years, it has been virtually impossible for anyone with a serious mental illness to qualify for the DTC without appealing the decision by the CCRA to the Tax Court of Canada. In Buchanan v. Her Majesty the Queen, Judge Diane Campbell recognized that “disability” did not mean “inability.” She found that Mr. Buchanan’s disability (bipolar disorder) was severe enough to meet the highly restrictive criteria of the Income Tax Act even though he has maintained many of his intellectual capabilities, as well as the ability to take care of his personal needs, make his own decisions regarding medical treatment and participate as a board member for mental health associations.

As far as Judge Campbell was concerned, Mr. Buchanan’s psychiatrist misinterpreted the Income Tax Act when completing the DTC Certificate for his patient. But that is hardly surprising because the questions in the form are incomplete, inaccurate and ambiguous. The psychiatrist, who was called as a witness for the Respondent, had checked the box on one page indicating that his patient was “markedly restricted” in his “mental functions.” However, when asked, “Is your patient able to think, perceive and remember…?”, he checked the “yes” box, ultimately disqualifying Mr. Buchanan’s eligibility for the DTC.

The CCRA does not agree with Judge Campbell’s ruling. A Notice of Application for Judicial Review has been filed in the Federal Court of Appeal by the Attorney General of Canada on behalf of the Minister of National Revenue for a judicial review of her judgment.

Not surprisingly, CCRA officials view the concept of disability in far more restrictive terms than do those in the disability community. There is no question that setting appropriate parameters for mental impairments is a more complicated process than for physical impairments. On the other hand, case law provides significant guidelines for government officials in the determination of whether or not an individual’s specific disability falls within the eligibility criteria. The Government has a responsibility to review and revise the DTC certificate when required, based on the interpretation of the Income Tax Act by the Tax Court.

There is a need to educate not only the public, but also health professionals and government bureaucrats. This process of education can only continue by ensuring that a greater diversity of claims for the DTC are appealed in Tax Court. This is an important opportunity for all organizations to provide as much support as possible to assist these individuals with the Tax Court process. These actions will ultimately lead to a greater understanding of the complexities of mental impairments and the need to ensure that these individuals receive fair and unbiased treatment based on the eligibility criteria of the Income Tax Act rather than relying on preconceived and mistaken notions held by government officials when determining the language used in the DTC Certificate.

Individuals with mental impairments are the most vulnerable members of our society who are unable to organize themselves effectively. Unlike individuals with physical disabilities, they do not have the intellectual capacity and mental stamina to pursue their causes. Generally speaking, mental health organizations have not had very much success at getting the attention of the Canadian government with regard to issues of national importance. Individuals like Dennis Radage and James Buchanan must rely on the strength and fortitude provided by family members, often with limited financial resources, in order to obtain justice.

The Income Tax Act was not designed to provide tax relief only for individuals with physical disabilities. Therefore, a sub-mission requesting a full review of the DTC Certificate Form T2201 has been presented to the Parliamentary Sub-committee on the Status of Persons with Disabilities, chaired by Dr. Carolyn Bennett, M.P. (St. Paul’s).

For further information about the submission, contact Dr. Bennett’s office at the House of Commons in Ottawa (613 995-9666) or e-mail bennec@parl.gc.ca.

ADDENDUM

The following are quotes from Judge Diane Campbell’s Reasons for Judgment in Buchanan v. Her Majesty the Queen

“From the facts and the evidence, it is clear, in answering the questions on the form, he [the psychiatrist] clearly held the incorrect view that most individuals with mental impairments did not qualify for the credit and that it was intended instead for those (as he wrote in his correspondence to the Appellant) who had difficulty ‘feeding themselves, dressing, using the toilet or carrying on a simple conversation.’ He clearly did not understand that the six items defining a basic activity of daily living, as contained in subsection 118.4 (1) (c), are not to be read together, but each activity is treated separately.”

“Mrs. Buchanan stated that although [Mr. Buchanan’s] perception of reality is blurred and consequently his thinking distorted, he can deal with some items in a lucid manner…. She stated that to members of the public he can appear functional and lucid while in the throes of a severe episode. She stated that he has an uncanny ‘knack for masking his symptoms,’ hiding as she stated, ‘behind a façade of normalcy.’… She stated that his thought processes and judgment were affected every day, although this might not be readily apparent to those around him or even to his own doctor…. Mrs. Buchanan described his disease as one with ‘continuous symptoms varying in severity.’ One can never know, she stated, when he is scheming to engage in inappropriate, irrational behaviour.”

“[The psychiatrist] stated that in a number of areas [Mr. Buchanan’s] ability to think and perceive is impaired. He indicated that he might be able to present well to the public even when quite ill. That while being mentally impaired, he could otherwise function quite well at some level or perform some skill while the remaining thought processes were impaired…. In fact, [the psychiatrist] stated that it would be possible for [Mr. Buchanan] to be quite ill and yet his own doctor would not necessarily recognize it.”

“Although [Mr. Buchanan] is certainly able to operate adequately in some areas, his impairment permeates his entire existence. The facts support that while engaged in some seemingly rational activity to the outsider, all other thought processes are otherwise exploding in an array of erratic, bizarre and potentially harmful activities. However, [Mr. Buchanan’s] ability to perceive, think and remember, although not non-existent, is of such a severity that his entire life is affected to such a degree that he is unable to perform the necessary mental tasks required to live independently and competently in everyday life.”

“I conclude that [Mr. Buchanan’s] condition and resulting behaviour so far exceeds the normal and reasonable ambit that he comes within the otherwise very narrow confines of these sections [118.3 and 4] of the [Income Tax] Act…. The facts quite clearly demonstrate that [Mr. Buchanan] does not engage in rational, logical, organized thought processes. His judgment does not permit him to function reasonably and independently. It is an obvious case.”