31 August 1998 External T.I. 9820265 - MED EXP - PRENATAL CLASSES, BLOOD BANK FEES

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether expenses in respect of i) prenatal and other type of classes offered by various boards of health or other health agencies, ii) the Cord Blood Programme, which involves taking blood cells from new-born babies in case the child suffers an illness in the future, and iii) private blood banks, qualify as medical expenses.

Position:

Question of fact, but likely no.

Reasons:

There were two possibilities, i.e., that they qualify under 118.2(2)(a) or 118.2(2)(o). The former was ruled out since to qualify thereunder payments must be in respect of medical services, which, in our view, must involve a medical condition. In our view, the particular expenses fail to meet this condition. The particular expenses do not qualify under the former provision since to qualify thereunder the expenses must be diagnostic, which they weren’t.

XXXXXXXXXX 	J. Gibbons
		5-982026

Attention:  XXXXXXXXXX

August 31,  998

Dear XXXXXXXXXX:

We are replying to your letter of July 31, 1998, in which you inquire whether certain expenditures qualify as medical expenses for purposes of the medical expense tax credit under section 118.2 of the Income Tax Act (the “Act”). You are specifically concerned with amounts paid for:

i) prenatal and other type of classes offered by various boards of health or other health agencies;

ii) the “Cord Blood Programme” which involves taking blood cells from the umbilical cord of new-born babies and storing it in case the child suffers an illness in the future; and

iii) private blood bank retrieval and storage fees.

Paragraph 118.2(2)(a) of the Act provides that medical expenses include amounts paid to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of “medical or dental services.” Although it is a question of fact whether a payment is made in respect of medical services, it is our view that to be regarded as such, the payment must involve an existing medical condition or illness. In our opinion, the expenses described in your letter do not involve an immediate medical condition or illness, rather they are preventive in nature. Accordingly, in general terms, amounts paid for such services would not qualify as medical expenses under this paragraph.

We have also considered the provision of paragraph 118.2(2)(o) of the Act which deals with amounts paid for laboratory, radiological or other diagnostic procedures or services prescribed for a patient by a medical practitioner or dentist. Under this provision, the procedures or services must, together with the necessary interpretations, maintain health, prevent disease or assist in the diagnosis or treatment of any injury, illness or disability. Further, the reference in paragraph 118.2(2)(o) of the Act to “other diagnostic procedures or services” is generally limited to diagnostic services or procedures of the same class as laboratory or radiological services. In other words, the procedures or services must assist a medical practitioner in making a diagnosis and formulating a course of treatment. As none of the expenses described in your letter address such purposes, they would also not qualify under this paragraph.

Since the expenses described in your letter do not appear to qualify under paragraphs 118.2(2)(a) or (o), and since no other paragraph of the provision seems to apply, it is our view that such expenses would not qualify as medical expenses for purposes of the medical expense tax credit.

We trust that these comments will be of assistance.

Yours truly,

J.F. Oulton, CA
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate

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