One would think that the Income Tax Act applies equally to all Canadians regardless of their province of residence, and that a taxpayer in Ontario would be entitled to the same deductions as a taxpayer in British Columbia or Newfoundland. Unfortunately, this is not always the case. In Celine Parent (Appellant) v. Her Majesty the Queen (Respondent); 2006-3284(IT)I; 2007 DTC 1742, the taxpayer sought to have fees paid to a naturopathic doctor allowed as a medical expense.
The taxpayer is a Quebec resident and paid $1,810 to a Quebec naturopath in 2004. She claimed this amount as a medical expense on her federal income tax return. The Minister of National Revenue initially accepted the claim, but issued a reassessment in November 2005 disallowing the deduction. The reason? Naturopaths are not regulated in Quebec and, therefore, pursuant to the provisions of subsection 118.2(2), payments to them for services are not eligible medical expenses.
Parent appealed to the Tax Court of Canada. She argued that it was unfair to disallow fees paid to a naturopath in Quebec, while fees paid to a naturopath in Ontario would be allowed. She submitted that naturopaths are recognized under the Quebec health system and fees paid to them are allowed as medical expenses under the Quebec Income Tax Act, and the Minister’s interpretation of subsections 118.2(1) and 118.2(2) penalizes Quebec taxpayers.
While the Court was sympathetic to the taxpayer, Parent’s appeal was dismissed. The arguments were reasonable, but the Court held that it lacked jurisdiction to give effect to them, since the question of recognizing naturopaths as medical practitioners falls within provincial legislative jurisdiction.
When I saw this case, I was somewhat mystified, as I have been deducting naturopath fees for clients for as long as I can remember without a problem. The CCH publication, Preparing Your Income Tax Returns, includes naturopath services in its list of allowable medical expenses.
It would seem that amounts paid to naturopaths would qualify as medical expenses; however, the definition of medical practitioner in subsection 118.4(2) contains certain limitations:
(2) Reference to medical practitioners:
For the purposes of sections 63, 64, 118.2, 118.3 and 118.6, a reference to an audiologist, dentist, medical doctor, medical practitioner, nurse, occupational therapist, optometrist, pharmacist, physiotherapist, psychologist, or speech-language pathologist is a reference to a person authorized to practise as such,
||where the reference is used in respect of a service rendered to a taxpayer, pursuant to the laws of the jurisdiction in which the service is rendered;|
||where the reference is used in respect of a certificate issued by the person in respect of a taxpayer, pursuant to the laws of the jurisdiction in which the taxpayer resides or of a province; and|
||where the reference is used in respect of a prescription issued by the person for property to be provided to or for the use of a taxpayer, pursuant to the laws of the jurisdiction in which the taxpayer resides, of a province or of the jurisdiction in which the property is provided.|
This subsection defines “medical practitioner” as a person authorized to practise in the jurisdiction where the service is performed or where the taxpayer resides. The Minister appears to have taken the position that because naturopaths in Quebec are not regulated, they are not qualified to practise in Quebec. But naturopaths are practising in Quebec, and many are part of the Quebec Association of Naturopathic Medicine.
I’m sure there is much more to this than the reasons for judgment provide, but I feel the decision is wrong.
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