CSANews Issue 83

Our congratulations to the Canadian Snowbird Association, again!

One of the Canada Revenue Agency (CRA ) offices decided that if any part of a travel insurance policy contained benefits that were not of a medical nature, then a tax deduction would be denied for the entire policy premium. We had numerous phone calls and e-mails from CSA members, as well as from non-members, whose tax returns were being reassessed for substantial amounts of money.

Needless to say, we immediately dug up the applicable section of the Income Tax Act and, to our surprise, that is exactly what it said. The CRA was correct! But it was very unfair, especially to Medipac clients, whose premiums were almost entirely healthrelated.

We do understand baggage insurance, trip cancellation insurance and other non-health-related benefits not being tax
deductible, of course.

To make a very long story short, Mike MacKenzie, CSA’s executive director, hopped on a plane to Ottawa and was able to meet with senior members of Finance Minister Flaherty’s staff. He explained the unfairness of this particular clause in the act, especially for snowbirds. The government action was swift and decisive and our problem was resolved. A letter has been sent out to all CRA offices advising them that the portion of a travel insurance policy premium relating to medical benefits will, from now on, be fully deductible. What a pleasure it is to deal with this government!

Medipac will issue revised receipts where necessary and the issue is fully resolved. Perhaps those non-CSA members – whom we were able to assist – might consider using a small part of their tax gains to become CSA members. Lifetime memberships would be appropriate.

Sincerely
J. Ross Quigley
Editor