2023-0962281E5 METC- Cataract surgery

Principal Issues: Whether the cost of an aspheric lens as part of cataract surgery qualifies as an eligible medical expense for the purposes of the METC.

Position: Yes, the amount paid to a local public or licensed private hospital for an aspheric lens as part of cataract surgery qualifies as an eligible medical expense for the purposes of the METC.

Reasons: Paragraph 118.2(2)(a) allows amounts paid to a local public or licensed private hospital in respect of medical services provided to an individual as an eligible medical expense.

Author: Underhill, Cynthia
Section: ITA: Section 118.2, subsection 118.4(2); paragraphs 118.2(2)(a) and 118.2(3)(b).

XXXXXXXXXX                                                                     2023-096228
                                                                                             C. Underhill

April 5, 2023

Dear XXXXXXXXXX:

Re: Cataract Surgery

We are writing in response to your correspondence dated January 31, 2023, asking whether the cost you incurred for an aspheric lens as part of cataract surgery qualifies as an eligible medical expense for the purposes of the medical expense tax credit (METC).

You advised us that during cataract surgery, an ophthalmologist inserted an aspheric lens. You explained that in the province of British Columbia (BC), the cost of a basic lens is paid for by BC’s provincial health insurance plan (PHIP), but a premium longer lasting lens (i.e., the aspheric lens) is not covered by BC’s PHIP. You paid your local public hospital for the incremental cost of the aspheric lens over a basic lens.

Our comments:

This technical interpretation provides general comments about the provisions of the Income Tax Act (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 IC 70-6R12, Advance Income Tax Rulings and Technical Interpretations.

The Canada Revenue Agency’s general views regarding the METC are contained in Income Tax Folio S1-F1-C1, Medical Expense Tax Credit (the “Folio”) which is on the Government of Canada website at www.canada.ca.

Paragraph 118.2(2)(a) of the Act allows as an eligible medical expense of an individual, an amount paid to a medical practitioner, dentist, or nurse or a public or licensed private hospital for medical or dental services provided to a patient. As explained in paragraphs 1.26 and 1.27 of the Folio, medical services are diagnostic, therapeutic or rehabilitative services that are performed by a medical practitioner acting within the scope of his or her professional training. Generally, a payment to a medical practitioner is an eligible medical expense when made in respect of a medical service or procedure that relates to an existing condition or illness of the patient. You have indicated that the incremental cost of the aspheric lens over a basic lens as part of cataract surgery was paid to your local public hospital. Therefore, in our view, the amount paid to the local public hospital for the incremental cost of the aspheric lens over a basic lens would qualify as an eligible medical expense under paragraph 118.2(2)(a) of the Act.

As noted in paragraph 1.16 of the Folio, qualifying medical expenses of an individual do not include any expense for which the individual or certain other persons are entitled to be reimbursed (for example under a public or private medical or hospitalization plan), except to the extent that the amount of the reimbursement is required to be included in income. We can not comment on what expenses your private health services plan covers.

We trust that these comments will be of assistance to you.

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

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