The Canadian Medical Cannabis Industry Association (CMCIA) announced that the Canada Revenue Agency, in a letter dated August 24, 2015, officially confirmed that medical cannabis purchased by an individual from a licensed producer under Health Canada’s Marihuana for Medical Purposes Regulations (MMPR) would be an allowable medical expense under the Income Tax Act.
Specifically, the letter notes “that while amendments to the Income Tax Act have yet to be introduced to recognize the MMPR, “[T]he CRA will not disallow eligible medical expenses claimed for the purchase of medical marihuana allowable under these new regulations”.
Currently, allowable medical expenses under the Income Tax Act include prescription medicines lawfully acquired for use by an individual, when prescribed by a medical practitioner. Non-prescription or over-the-counter drugs cannot be claimed, even when recommended by a physician.
“This is an important step in acknowledging the legitimacy of the way patients use medical cannabis, to help manage the symptoms of a range of health conditions,” said Neil Belot, Executive Director of the CMCIA. “We have been working with the CRA and the Department of Finance for several months to clarify this issue, and we’re extremely pleased that cannabis regulated by Health Canada has been recognized as an allowable tax expense. It’s very good news, and will help make the use of cannabis as medicine more accessible and affordable for patients.”
The medical expense tax credit provides tax relief for individuals who have sustained significant medical expenses for themselves or certain of their dependants. The medical expense tax credit is a non-refundable tax credit that is applied to reduce the tax liability of an individual.