*Complimentary Issue*

[Special Edition] Volume. 5 Issue. 23 – May 25, 2021

In this special edition of the LAT inFORMER, on May 20, 2021, the Divisional Court ruled that HST is payable within the available limits regarding Attendant Care Benefits for accidents before June 3, 2019.

Court Rules HST Included in Limits for Attendant Care Benefits

There ARE Limits – The Court has ruled in Dominion v Ridi (18-002185), on whether HST is considered as being payable within the available limits regarding Attendant Care Benefits. The insurer was paying ACB as a result of Ridi being catastrophically injured in a March 2014 accident. Payments were made on the basis that HST was paid out of the available $6,000 monthly maximum and the $1,000,000 policy limit. Ridi applied to the Tribunal seeking an order that HST be paid in addition to these two sums. The Tribunal found in Ridi’s favour, upheld upon reconsideration. The insurer appealed to the Court for this matter of statutory interpretation, a question of law, therefore the standard of review was correctness.

The Court noted that since the original decision the Schedule had been amended, effective June 3, 2019. Specifically the Schedule reflected that monthly ACB in catastrophic cases to be “$6,000 per month plus the amount of any applicable harmonized sales tax payable under Part IX of the Excise Tax Act (Canada) for accidents that occur on or after June 3, 2019”, with the policy limit for medical and ACB similarly now being $1,000,000, in addition to HST. The Court however referenced s.56 of the Legislation Act that notes “The repeal, revocation or amendment of an Act or regulation does not imply anything about the previous state of the law or that the Act or regulation was previously in force. The amendment of an Act or regulation does not imply that the previous state of the law was different.” Therefore, the Court reasoned that “the amendments, then, do not help us to interpret the legislation as it read before.”

The Tribunal had relied upon citations in select published Guidelines. The Court noted the only one dealing with ACB is (Guideline 03/10) which “does not mention HST and does not preclude payment for HST amounts as reasonable and necessary expenses in addition to the hourly rates. It does not purport to authorize payments that exceed the limits in s.19(3) of the Schedule.” Both the Professional Services Guideline and the Cost of Goods Guideline note HST is payable as a reasonable and necessary expense and do not purport to authorize payment in excess of the limit set by s.18.

The Court then referenced Bulletin No. A-04/15 which cited the Guidelines from the Superintendent Financial Services that indicate “‘if the HST is considered by the CRA to be applicable to any of the services or fees listed in this guideline, then the HST is payable by the insurer in addition to the fees as set out in this guideline’… FSCO expects that insurers will apply the HST legislation correctly in accordance with any direction from CRA. The HST is a tax and is not part of the benefit limits set out in the SABS.” This June 2015 bulletin, “to the extent that it suggests that HST is a tax, not an expense within the meaning of the Schedule…is contradicted by the cost of goods guideline issued in 2016, which specifically states that HST is to be considered a ‘reasonable expense’. In my view the use of this non-binding bulletin led to a non-sequitur in the Adjudicator’s reasoning, to wit: that HST is not a reasonable and necessary expense, but the insurer must pay it.”

The Court further noted that “the statutory scheme specifically contemplates that insured persons may not be fully compensated for the costs associated with their care and rehabilitation.” Given all of the foregoing, the Court concluded that with respect to ACB, “The only applicable guideline says nothing about HST and does not purport to authorize payment in excess of the limits in s.19(3) of the Schedule.” Therefore, “for accidents that occurred before June 3, 2019, amounts of HST payable for taxable attendant care services are to be paid as part of the attendant care benefit, in addition to the hourly rate set by the Guideline, but only to the extent of $6,000 a month and $1,000.000 in total. This approach is consistent with the purpose and scheme of the Schedule’s approach to accident benefits in general and does not lead to any anomaly or absurdity.”

As a result, the Adjudicator’s interpretation of s.19 was incorrect. The appeal was allowed, setting aside the Tribunal’s decision. The parties agreed that there would be no order as to costs.

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