Feds reviewing METC eligibility

Clarification on over-the-counter drugs might put Quebec PHSP sponsors in impossible position
By Melissa Hamelin
|Canadian HR Reporter|Last Updated: 09/22/2008

The federal Department of Finance has released draft legislative proposals to provide clarification on which over-the-counter (OTC) medications will be eligible for the Medical Expense Tax Credit (METC), but some worry the new criteria will only breed further confusion and problems.

“In a way there is a problem that has emerged because of the change, but it’s a problem not in the rules themselves, but how the rules are applied by the Canadian Revenue Agency (CRA). It’s right now a question of how you fix it,” said Karen DeBortoli, director of the Canadian Research and Innovation Centre at Watson Wyatt Canada in Toronto.

The issue first came to light after the release of the 2008 federal budget when the wording of the Income Tax Act was changed so OTCs were no longer eligible for the credit, with the exception of oxygen, insulin and vitamin B12 for pernicious anemia.