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11
CSANews
|
FALL 2012
CSA
update
Government Relations
report
Ron Steeves
First Vice-President
In the summer edition
of
CSANews
,
Editor Ross Quigley outlined how one
of the largest Canada Revenue Agency
offices in Canada had decided that, if
any part of a travel medical insurance
policy contained benefits that were
not of a medical nature, then a tax
deduction would be denied for the
entire policy premium. This obviously
caused a great deal of concern for CSA
members and, quite frankly, many trav-
elling Canadians whose trips outside
of Canada were about to get more
expensive.
This interpretation was grossly
unfair, particularly to Medipac clients,
whose premiums were almost entirely
medical in nature. If 5% of a policy is
deemed to be “non-medical” and 95%
medical, how is it fair to disallow the
entire tax deduction? It would seem to
me that, in this example, the common
sense approach would be to allow a
tax deduction for 95% of the premium,
provided that the insurer supplies a
breakdown of the relevant premium.
CSA officials took this concern
directly to the federal government. In
May and June, we sat down with senior
staff in the offices of federal Finance
Minister Jim Flaherty and Minister of
National Revenue Gail Shea. They were
initially unaware of these tax rulings
and agreed with our position on this
issue. They agreed to immediately
investigate and I am happy to report
that the Canada Revenue Agency has
instructed their auditors to ensure that
purchasers of travel medical insurance
remain eligible for the medical expense
tax credit. As a matter of fact, because
most travel medical insurance plans are
primarily medical, the Canada Revenue
Agency has agreed to simply accept all
travel insurance medical travel plans
as 100% eligible, to avoid the hassle
of having to go back to your insur-
ance provider and request a detailed
breakdown.
If you have already received an
unfavourable ruling from the Canada
Revenue Agency, please appeal the
decision and you should have no prob-
lem with getting the initial decision
overturned. If there is a problem, please
contact us at the CSA office in Toronto
and we will be happy to assist you.
This is a big win for the Canadian
Snowbird Association and it’s a big
win for all travelling Canadians. I would
like to thank federal Finance Minister
Jim Flaherty and Minister of National
Revenue Gail Shea for listening to our
concerns and taking action in such
a timely fashion. I would also like to
thank the members of their staff and
the people at the Canada Revenue
Agency who helped fix this problem for
travelling Canadians.
So, what’s happening with our
“Canadian Retiree Visa”? Well, not a lot
since our update in the summer issue
of the magazine, but don’t panic, that’s
not bad news. All of our bills are pres-
ently before both the House and Senate
judiciary committees, which are taking
a break during the month of August. I
have hadmany people express concern
that, as this is an election year, there is
a fear that our bills will not be passed
prior to November. Quite honestly, that
is a very realistic possibility.
Although our proposal enjoys
bipartisan support, there are many
things in our bills that benefit both
parties and there’s no hurry for either
side to help the other this close to an
election. Having said that, our proposal
is an ideal candidate to move in a “lame
duck” session of Congress.
A “lame duck” session of Congress
occurs whenever one Congress meets
after its successor is elected, but before
the successor is sworn in. Members of
Congress who lose in the 2012 elec-
tions can freely vote to raise or lower
taxes, increase or cut spending, or
even increase the debt limit without
ever having to face the voters again.
Many things can happen during such
a session…some good, some not so
good. The point is that many political
considerations go out the window for
two or three months and the gridlock
can ease temporarily. From what we’re
hearing, this is shaping up to be a
potentially “world-class, lame duck ses-
sion.”We will be back in Washington in
September and I’m confident that we’ll
get this done.