2021-0906701E5 Mandatory COVID-19 tests - whether prescribed

Principal Issues: Whether COVID-19 tests for travellers entering Canada satisfy the condition in paragraph 118.2(2)(o) of being prescribed by a medical practitioner, when the tests are mandated by an Order in Council (OIC) that is made pursuant to the Quarantine Act.

Position: No.

Reasons: An OIC that is made under the Quarantine Act is a legal instrument that is fundamentally different from an order or prescription that a medical practitioner normally uses in their clinical practice. Namely, the “prescribed” requirement in paragraph 118.2(2)(o) does not connote a legal obligation on individuals to undergo a diagnostic procedure or service, as it is the case with the OIC in question. Also, the OIC is technically made by the Governor General who, in our view, would not be providing medical services as a medical practitioner as defined in subsection 118.4(2).

Author: El-Kadi, Randa
Section: 118.2(2)(o); 118.4(2)

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                                                                                        2021-090670
                                                                                        Randa El-Kadi

August 23, 2022

Re: Medical expense tax credit and COVID-19 tests for travel

Dear XXXXXXXXXX,

We are replying to your correspondence of August 19, 2021 wherein you ask our views on whether COVID-19 tests that are mandated by an Order In Council (OIC) (footnote 1) could be considered to satisfy the condition of being “prescribed by a medical practitioner” for purposes of paragraph 118.2(2)(o) of the Income Tax Act (the Act).

You state that the requirement that an individual take a COVID-19 test to enter Canada is mandated by the OIC that was made pursuant to section 58 of the Quarantine Act. You suggest that the OIC may have been recommended by the Public Health Agency of Canada (PHAC), which is expected to have health professionals among its staff. We apologize for the delay in our response.

Our comments

This technical interpretation provides general comments about the provisions of the Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC70-6R12, Advance Income Tax Rulings and Technical Interpretations.

Pursuant to paragraph 118.2(2)(o) of the Act, eligible medical expenses include amounts paid for laboratory, radiological or other diagnostic procedures or services together with necessary interpretations:

* for maintaining health, preventing disease or assisting in the diagnosis or treatment of any injury, illness or disability;

* for the patient; and

* as prescribed by a medical practitioner.

Subsection 118.4(2) of the Act contains interpretive rules relating to references to medical practitioners for purposes of certain provisions of the Act, including for the medical expense tax credit. While paragraphs 118.4(2)(b) and (c) of the Act apply to certifications and prescriptions for “property” (e.g., drugs or medical devices) respectively, paragraph 118.4(2)(a) of the Act provides that where the reference to a medical practitioner is used in respect of a service rendered to an individual, that reference is to a person authorized to practice as such pursuant to the laws of the jurisdiction in which the service is rendered. In our view, a person is authorized by the laws of the jurisdiction to act as a medical practitioner if there is specific legislation that enables, permits or empowers the person to perform medical services.

Based on the Glossary on the Privy Council Office website, (footnote 2) an OIC is described as “A legal instrument made by the Governor in Council pursuant to a statutory authority or, less frequently, the royal prerogative. All OICs are made on the recommendation of the responsible Minister of the Crown and take legal effect only when signed by the Governor General.”

It is our understanding that the term “Governor in Council” refers to the Governor General acting on advice given by federal Cabinet (the Privy Council’s operative branch). Based on the foregoing, the possibility that an OIC may have been recommended by health professionals within the federal Government does not, for the purposes of paragraph 118.2(2)(o) of the Act, satisfy the requirement that the laboratory, radiological or other diagnostic procedures or services be prescribed by a medical practitioner. The OIC is made by the Governor General, who in our view, would not be providing medical services as a medical practitioner as defined in subsection 118.4(2) of the Act.  

We also note that a legal instrument such as the OIC mentioned above is fundamentally different from an order (or prescription) that a medical practitioner normally makes in their clinical practice. For example, the OIC in this case requires individuals entering Canada to provide evidence of COVID-19 testing. Conversely, the “prescribed” requirement in paragraph 118.2(2)(o) of the Act does not connote a legal obligation for an individual to undergo diagnostic procedures or services.

It is also worth noting that in the context of prescribing diagnostic procedures, such as those referred to in paragraph 118.2(2)(o) of the Act, health professionals seem to be bound by the requirements from their respective provincial or territorial regulatory bodies. These seem to generally require health professionals to keep records of all tests they order, along with details of the follow-up they make regarding clinically significant test results. It seems unlikely that such requirements would apply to the Governor General or to health professionals in government advisory roles (e.g., in Health Canada or PHAC) in situations where COVID-19 tests are mandated for travellers entering Canada.

Based on the foregoing, it is our view that COVID-19 tests that are mandated by OIC do not meet the requirement of being prescribed by a medical practitioner, as provided for in paragraph 118.2(2)(o) of the Act.

We trust our comments will be of assistance.

Yours truly,

Lita Krantz, CPA, CA
Manager
Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

FOOTNOTES

Note to reader: Because of our system requirements, the footnotes contained in the original document are shown below instead:

1 The relevant Order in Council (OIC- PC number 2021-0825) is titled “Minimizing the Risk of Exposure to COVID-19 in Canada Order (Quarantine, Isolation and Other Obligations).”

2 The webpage titled “Orders in Council” can be accessed at https://www.canada.ca/en/privy... (check the Glossary tab)

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