Vitamin supplements not a valid expense: Only prescription drugs qualify for medical tax credit
The growing popularity of vitamin, mineral and health supplements has spurred
a slew of tax cases in the past few years in which the courts have been asked to
determine whether the costs of such medical treatments qualify for the medical
expense tax credit.
The most recent case, released last week, involved an Edmonton taxpayer who
claimed the medical expense tax credit on his 2002 tax return for the cost of
vitamin supplements, prescribed by his doctor and purchased at a pharmacy.
Michael Melnychuk suffers from chronic heart disease and, upon his doctor's
advice, receives chelation therapy, a controversial process of removing toxins
and other metabolic wastes from the bloodstream that has been touted by some
physicians as a non-surgical alternative to bypass surgery.
Mr. Melnychuk's doctor prescribed various vitamin supplements in conjunction
with the chelation therapy. Mr. Melnychuk had these prescriptions filled at a
pharmacy and claimed their costs as a medical expense on his tax return.
The Income Tax Act defines a medical expense as "an amount paid ... for
drugs, medicaments or other preparations or substances ... purchased for use by
the patient as prescribed by a medical practitioner or dentist and as recorded
by a pharmacist."
The issue before the judge was whether or not the vitamin supplements
prescribed met the Act's requirements that they be "recorded by a pharmacist."
Richard Fong, a pharmacist who worked at Nutrition Plus Pharmacy in Edmonton
where Mr. Melnychuk had the vitamin supplement prescriptions filled, testified
that the vitamin supplements purchased were available without a prescription.
The meaning of the phrase "recorded by a pharmacist" was specifically
addressed in a similar case decided by the Federal Court of Appeal just over a
year ago. In that case, the judge explained that the recording requirement "is
intended to ensure that tax relief is not available for the cost of medications
purchased off the shelf."
Under the Pharmaceutical Profession Regulations, a pharmacist who dispenses a
drug must keep a record containing certain information for each prescription
filled. Such information includes: the name of the patient and the prescribing
physician, the date, the name, strength and dosage of the drug along with its
DIN (drug identification number), among other pieces of information.
The Pharmaceutical Profession Act defines "drug" as a "substance ... listed
in the Schedules to that Act." Since over-the-counter medications are not listed
in the schedules, (thus, their availability literally "over the counter"), a
pharmacist is not required by law to keep a record when dispensing them.
The judge found that just because a particular medication or vitamin
supplement is prescribed by a physician, and is purchased at a pharmacy, the
sales slip or invoice from the pharmacist is not the type of "recording" the Tax
Act had in mind.
Unfortunately for Mr. Melnychuk, the judge had no choice but to dismiss the
case and disallow the medical expense tax credit for the over-the-counter
vitamin supplements. What is most surprising, however, is that this issue
continues to come before the courts on a regular basis, despite the fact that no
taxpayer has ever been successful in claiming non-prescription medications as a