18 March 1999 Ministerial Letter 9902808 - ALBERTA HEALTH CARE PREMIUMS

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.

XXXXXXXXXX

March 18, 1999

Dear XXXXXXXXXX:

Thank you for your letter of January 14, 1999, on behalf of your constituent, XXXXXXXXXX, regarding the income tax treatment of Alberta health care premiums paid on behalf of an employee by his or her employer, former employer or superannuation fund.

It is our understanding that individual residents of Alberta are required to pay premiums for the Alberta health plan. However, the terms of some employment contracts or superannuation plans provide for the reimbursement of part or all of these health care premiums that are paid by the individuals. Such benefit payments are generally made by way of rebate to the individual since the premiums are paid directly by the individual to the Alberta health plan.

Health care premiums that are the liability of an individual and that are paid by an employer, former employer or superannuation fund are taxable in the hands of the individual. In contrast, in a province where health care premiums are the responsibility of the employer, for example, because of a levy on payroll, the liability is that of the employer and not the employee. Accordingly, the payment of the premiums by the employer would not result in a taxable benefit to the employee.

Your constituent believes that the payment of an individual’s Alberta health plan premiums by the individual’s employer, former employer or superannuation fund should not be a taxable benefit and that the tax applicable to this taxable benefit should be eliminated or else applied equally to all Canadians, regardless of provincial residence. As this would require an amendment to the Income Tax Act, which is the responsibility of the Honourable Paul Martin, Minister of Finance, I have sent him a copy of our correspondence, for consideration.

I trust my reply will assist you in replying to your constituent.

		Yours sincerely,

		Herb Dhaliwal, P.C., M.P.

c.c. The Honourable Paul Martin, P.C., M.P.

Minister of Finance

c.c. Minister’s Office, Political Assistant

Gwen Moore
February 22, 1999
952-1506

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