2 February 2005 Ministerial Correspondence 2004-0107931M4 - Medical Expense - hot tub

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.

Principal Issues: The client requested that the CRA revise its position that the cost of a hot tub does not qualify as a medical expense.

Position: It remains the CRA position that the cost of a hot tub is not a qualifying medical expense.

Reasons: The relevant legislation does not provide for a hot tub as a qualifying medical expense.

February 2, 2005

XXXXXXXXXX

Dear XXXXXXXXXX:

I am writing in reply to your letter of November 19, 2004, to Mr. Roderick G. Quiney, Assistant Commissioner, Pacific Region requesting that the Canada Revenue Agency ("CRA") revise its policy regarding whether an amount paid for the purchase of a hot tub is a qualifying medical expense.

Subsection 118.2(2) of the Income Tax Act (the "Act") provides a list of expenditures that qualify as medical expenses. Under paragraph 118.2(2)(m) of the Act, a payment in respect of prescribed medical devices and equipment may qualify as a medical expense if certain conditions are met. Generally, to qualify, the device or equipment must be prescribed by a medical practitioner and be included in the list of qualifying medical devices or equipment described in section 5700 of the Income Tax Regulations (the "Regulations").

The Tax Court of Canada has considered the issue of whether the cost of a hot tub is a qualifying medical expense in a number of cases, with the Court allowing the cost of a hot tub in some instances, and not allowing it in others. All of these cases were heard under the informal procedure. As you may be aware, decisions rendered under the informal procedure are not precedent setting. It remains our view that a hot tub is not included in the list of qualifying medical devices described in the Regulations, and, accordingly, an amount paid for a hot tub would not qualify as a medical expense.

As you are aware, the role of the CRA is to administer and enforce the Act as passed by Parliament. In our view, a legislative amendment to the medical expense provisions in the Act would be required to recognize the cost of a hot tub as medical expense. The primary responsibility for tax policy and legislation rests with the Department of Finance. I can assure you that they are aware of this issue.

While I regret that I could not give you a favourable reply to your request, I trust that the information provided will be helpful.

		Yours sincerely,

		Ed Gauthier
		Deputy Assistant Commissioner
		Tax and Regulatory Affairs
		Policy and Planning Branch

c.c.: Mr. Roderick G. Quiney

Assistant Commissioner
Pacific Regional Operations
708-333 Dunsmuir Street
Vancouver BC V6B 5R4

Bob Naufal
(613) 952-1506
January 12, 2005