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Federal Tax Proposal on Health and Dental Benefits

January 30, 2017

Dentist examining a patients teeth in the dentists chair at the dental clinic.


In December 2016, media reported that the federal government was considering taxing health- care benefits as part of its overall review of the Canadian income tax system. The federal government has not yet confirmed if it will implement this tax.

The federal government could net $2.9 billion dollars from an initiative like this, but compared to employer-sponsored plans that save the Canadian healthcare system $32.2 billion in preventative treatments, it doesn’t appear to be a fiscally sound trade-off.


Quebec residents are already paying provincial taxes on these benefits and an added federal tax will disadvantage families living in Quebec excessively. 


Taxing health care benefits would impact 13.5 million Canadians, and would cost Canadian families – the Conference Board of Canada estimates at least an additional $1,000 per family per year, or nearly twice that for Quebec residents. This tax would likely result in fewer employers willing to offer these benefits, and would also make access to necessary and preventative health care unaffordable for many lower income and middle-class Canadians. This preventative care helps to save publicly funded health-care systems by addressing and preventing health care issues early, keeping Canadians and their families healthy and productive.


The Canadian Dental Association has collaborated with other organizations to help Canadians protest any move by the federal government to implement a tax on employer-sponsored health plans. In January, they launched the website donttaxmyhealthbenefits.ca


Federal Retirees is working on your behalf, too. President Jean-Guy Soulière is pursuing a meeting with federal Finance Minister Bill Morneau to voice our members’ objections to a tax on health benefits, and to point out the burdens this would pose not only on retirees but on all Canadians.


Act today – go to donttaxmyhealthbenefits.ca and let federal Finance Minister Bill Morneau and your MP know that this tax will cost us all more than we bargained for.