The Canada Revenue Agency makes some tax allowances for people who need to travel for medical care, but it has always maintained fairly strict eligibility rules. Taxpayers who have to travel 40 kilometres or more to receive medical treatment that is not available locally can claim their transportation expenses as a medical expense. If they have to travel 80 kilometres or more they can also claim meals and lodging. If a patient is certified by a medical practitioner as being incapable of travelling without the assistance of an attendant, the same expenses may be claimed in respect of an accompanying individual.
In cases where a patient is hospitalized, the Canada Revenue Agency has typically restricted the allowable expenses to the one trip required to get to the hospital and back. Where a taxpayer has attempted to claim multiple trips back and forth from the hospital to attend to a family member, it has generally disallowed the claim.
But a recent Tax Court of Canada decision in Jordan v. The Queen suggests that, at least in some circumstances, this interpretation may be too restrictive. The taxpayer in this case, an H&R Block client, incurred $14,833 in travelling costs over a period of six months. He was travelling between Weyburn, his home, and Regina, where his wife was receiving treatment for a brain aneurysm. She was initially in a hospital and later in a rehabilitation centre. Predictably, the CRA reassessed the claim to allow only the cost of the first trip.
In allowing the appeal, the judge cited existing case law which held that medical travel could include not just the cost of moving the patient, but also related expenses incurred during the period of treatment. However, she then took the additional step to rule that this applied not only to the expenses incurred while away from home, but also to the expenses incurred in travelling back and forth between home and the hospital. According to the judge, “I do not see any principled reason for making a distinction between the two. They are both travel expenses incurred by an accompanying person during the period of treatment.”
The Jordan case was held under the Informal Procedure, which means that the CRA is not required to treat it as precedent-setting. This means we are not betting that it will change its position any time soon. However, the case demonstrates that taxpayers who are in a similar situation to Mr. Jordan may have their claims allowed if they are prepared to go through the appeals process.