Address can bring tax relief
The cost of visiting an osteopath is not a valid medical expense for tax purposes. But, depending on where you live, an appointment with your naturopath may very well qualify for tax relief.
The reason behind this bizarre and seemingly arbitrary distinction between allowable versus non-allowable medical expenses and geography stems from the wording in the Income Tax Act. That governs who qualifies to perform medical services for the purposes of the medical expense tax credit (METC).
Under the Act, valid medical expenses qualify for a 15 per cent federal METC as well as a provincial credit, provided they exceed a minimum threshold equal to the lesser of three per cent of your net income or $2,208.
For a medical service to be authorized, the services must be performed by a medical practitioner who is “authorized to practise as such … pursuant to the laws of the jurisdiction in which the service is rendered.”
The CRA’s view, based on prior jurisprudence, is that “an individual is authorized by the laws of the jurisdiction to act as a medical practitioner if there is specific legislation that enables, permits or empowers that individual to perform medical services. Generally, such specific legislation would provide for the licensing or certification of the practitioner as well as for the establishment of a governing body (for example, a college or board) with the authority to determine competency, enforce discipline and set basic standards of conduct.”
When it comes to naturopathy, however, it depends on where you live: B.C., Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia all regulate the profession, while the other provinces do not. Osteopathy is not listed as eligible in any jurisdiction, since in Canada, the practice of osteopathy is not regulated by any province or territory.
Quebec’s rules are even more confusing, as was highlighted in a technical interpretation letter published by the CRA last week. The CRA letter was in response to a taxpayer’s email asking whether osteopaths and naturopaths are authorized medical practitioners in the province of Quebec for purposes of the federal METC, since they already qualify as eligible “practitioners” for the purposes of the Quebec METC.
The Quebec personal provincial tax system is unique in that Quebec residents must file both federal and provincial tax returns, and each return is governed by a separate, distinct set of rules. Under the Quebec Tax Act, there is a specific provision that specifically permits the services rendered by naturopaths and osteopaths to be eligible for the Quebec provincial METC, despite the fact there is no regulatory body for either group in Quebec.
But when it comes to preparing their federal returns, Quebecers are out luck, as confirmed by the CRA’s response, which concluded that since “osteopaths and naturopaths in the province of Quebec are not medical practitioners within the meaning of (the federal) … Income Tax Act,” the cost of such visits do not qualify for federal tax relief in the province of Quebec.