441-01571 (Taxation)

Canada’s publicly funded universal health care system is a source of pride for all Canadians. It is an essential foundation for a strong, fair and prosperous nation. 

To support our health care system, the Government of Canada provides long-term, predictable funding to the provinces and territories mainly through the Canada Health Transfer (CHT). The CHT is the largest major transfer to provinces and territories and supports the principles of the Canada Health Act that underpin our public health care system. The CHT is allocated to the provinces and territories on an equal per capita basis to provide comparable treatment for all Canadians, regardless of where they live. In 2023-24, it will provide $49.2 billion to provinces and territories, an increase of 9.3 percent from 2022-23.

In addition, to ensure Canadians receive the care they deserve and need and strengthen our public health care system, Budget 2023 delivers $198.3 billion over 10 years, starting in 2023-24. This includes $46.2 billion in new funding to provinces and territories through new CHT measures, new tailored bilateral agreements to meet the needs of each province and territory, personal support worker wage support, and the Territorial Health Investment Fund.

Budget 2023 builds on significant investments made by the federal government to strengthen our public health care system since 2015. These have included:

• Providing $10 billion to provinces and territories to strengthen home care, community care, and long-term care for seniors;
• Improving Canadians’ access to mental health services, including through $5 billion to provinces and territories to increase community-based mental health and addictions services;
• Launching the Canada Dental Benefit for children under 12, which has already helped more than 300,000 children receive the dental care they need;
• Providing $5.5 billion for primary care and public health on reserve, distinctions-based mental health support, and non-insured health benefits for First Nations and Inuit;
• $1.2 billion to support 248 health-related infrastructure projects in First Nation communities;
• Investing more than $800 million since 2017 through the Canadian Drugs and Substances Strategy to support a compassionate and evidence-based response to the overdose crisis; and
• Launching a Sexual and Reproductive Health Fund to help make sexual and reproductive health information and services—including access to abortion—more accessible for vulnerable populations.

In this context, it is important to note that the purpose of the Medical Expense Tax Credit is to recognize that taxpayers with above-average medical expenses have a reduced ability to pay income tax as a result of incurring those expenses. The requirement that expenses be in excess of the lesser of $2,635 (in 2023) and 3 percent of income serves as a measure of above-average expenses. There is no upper limit on the total amount of expenses that may be claimed. 

Support for low-income workers is available through the Refundable Medical Expense Supplement. The Supplement is a refundable federal tax credit provided to individuals in low-income families, to provide some compensation for the medical and disability-related expenses they incur. Since the Supplement is refundable, individuals whose income is too low to pay taxes can benefit from the measure.