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Tax

Rules around eligible medical expenses need loosening

While recent news reports say the Canada Revenue Agency (CRA) is now allowing medical marijuana as an eligible medical expense, the agency’s recognition of health-related expenses is still too limited, Toronto tax litigation lawyer David J. Rotfleisch tells the Financial Post.

As the article says, recent online media reports have confirmed that the CRA will allow the costs of medical marijuana purchased from a licensed producer as a medical expense, as noted in a letter from the agency to the Canadian Medical Cannabis Industry Association.

Although the Income Tax Act has not been amended to recognize Health Canada’s Marijuana for Medical Purposes Regulation, the Financial Post notes that the Act allows deductions for prescription medications. Under the regulation, medical marijuana will require a prescription, says the article.

“It’s very good that CRA is recognizing medical marijuana as eligible since it is clearly a physician prescribed remedy,” says Rotfleisch, founding tax lawyer at Rotfleisch & Samulovitch Professional Corporation.

However, he adds, “CRA takes the position that physician prescribed natural remedies, including vitamins, even if [purchased] pursuant to a written physician prescription are not eligible medical expenses.”

On principle, Rotfleisch tells the Financial Post, it is difficult to distinguish between medically prescribed marijuana and other prescribed natural remedies. In Rotfleisch’s opinion, over-the-counter medications should also qualify as medical expenses.

“Cold remedies are clearly effective in alleviating cold symptoms, but don’t qualify as medical expenses,” he says. “It seems to me that this is an area that needs a loosening of the rules by CRA.”

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