The Income Tax Act (“ITA”) generally permits as an eligible medical expense of an individual, an amount paid to a medical practitioner, dentist, or nurse or a public or licensed private hospital for medical or dental services provided to a patient.

Medical services are diagnostic, therapeutic or rehabilitative services that are performed by a medical practitioner acting within the scope of his or her professional training. Generally, a payment to a medical practitioner is an eligible medical expense, and therefore eligible the Medical Expense Tax Credit (“METC”) when made in respect of a medical service or procedure that relates to an existing condition or illness of the patient. In the context of individuals receiving treatment to conceive a child, a medical service or procedure that relates to an existing illness would be one that is medically advisable because of an impending medical treatment (such as when a patient is to undergo chemotherapy for cancer that is likely to have a direct, significant, negative effect on reproductive functions). An existing condition in this context includes the medical condition of infertility.

Recently the Canada Revenue Agency (“CRA”) was asked to consider a scenario which involved a male individual in a same-sex spousal or common-law relationship who wanted to claim a medical expense tax credit (“METC”) for the expenses incurred in using the services of an egg donation organization and their fertility clinic to create embryos for surrogate implantation. More specifically, the expenses were paid to freeze those embryos, and the fertility treatments performed on the egg donor.

The CRA confirmed that the cost of freezing embryos for a patient when medically indicated (e.g., for the condition of infertility) qualified as an eligible medical expense, provided the expense eligibility requirements under the ITA were met. Currently, the ITA also permits expenses paid for reproductive technologies to be claimed as eligible medical expenses, even if they are not medically indicated because of a medical condition of infertility.

In the scenario considered, the cost of freezing embryos, as part of the in vitro fertilization (“IVF”) procedure prescribed by a medical practitioner, was paid for by the individual, and therefore was therefore an eligible medical expense for the purpose of claiming the METC.

As a further note, fees for the services of a surrogate mother are generally not eligible for the METC.

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