The muddied waters of a hot tub claim

"Around April Fools each year I like to dedicate a column to the lighter side of taxes, if there is such a thing..."

Around April Fools each year I like to dedicate a column to the lighter side of taxes, if there is such a thing.  Perhaps this tale will make you laugh, or at least make you shake your head with a smile on your face.

When it comes to what defines an allowable medical expense people use terms like confusing, unpredictable or inconsistent.  Let’s just call it, “evolving” shall we. This is one of the most fluid policy issues when it comes to personal tax.

Beyond the Canada Revenue Agency (CRA) reviewer on the phone, the CRA auditor visitation, and even beyond the CRA appeals process, did you know there’s a Canadian court dedicated just to tax?

The Tax Court of Canada – the check and balance for Canadian tax law – is the youngest superior court in Canada and hears appeals spurred by the interpretation of the Income Tax Act, among other similar Acts.  It’s the recourse for Canadian taxpayers – from the big corporation to the little guy.

So to the point at hand…

Indicative of defining allowable medical expenses is the case where an individual who required medically prescribed therapeutic hot tub and UVB unit treatments for a debilitating condition appealed CRA’s ruling that disallowed his mileage claim to the service.

He could not afford the equipment but was willing to travel the 50 kilometers to his parents’ home where they had this equipment.  He claimed travel expenses because it exceeded the 40 km travel threshold.

To make a long story short, after being disallowed by CRA this case eventually made it to the Tax Court of Canada, where the travel expenses were allowed on appeal.

So logically then, one might think, why not buy a hot tub when there is a medically prescribed therapy and claim the tub as a medical expense.  After all, CRA allows the travel expense to a hot tub owned by another person?

Well, be sure to buy the right tub.

In 2012, a Tax Court case upheld CRA’s ruling to not allow the purchase of a hot tub needed for prescribed therapeutic purposes for a severely disabled child.

The court’s reasoning was that this was a hot tub “that ordinary, healthy persons would use” so it, in and of itself, didn’t qualify as a medical expense.

The ruling begs the question, if this newly purchased “normal” tub had been a “specialized” tub, then would it have qualified as a medical expense?  It appears the Tax Court may be implying this.  To my knowledge, this hasn’t actually been tested in the court.

In summary, the first case makes it appear the Tax Court will define allowable medical expenses liberally if there is any interpretative “grayness” within CRA’s policies, but it’s equally apparent from the second ruling that this open mindedness of the Tax Court has its limits.

How did I start this column?  Oh ya, the definition of medical deductions is “evolving”.

If in doubt, call CRA or a tax professional.

Ron Clarke has his MBA and is a business owner in Trail, providing accounting and tax services. Email him at To read previous Tax Tips & Pits columns visit